Wheelhouse Exits Hosting Services, Seeks New Life As Software Provider

Wheelhouse

"We are exiting the professional services business and trying to get funded as a software company," company founder, chairman and CEO Frank Ingari told CRN Thursday morning.

Last month, the company shipped CRM Director, middleware for tying together data from various CRM systems. The software, which requires Solaris, costs $300,000 per server. Before that, Wheelhouse had concentrated on hosting CRM software, in an ASP model.

"For many companies, started with big, bold plans in 1999 with a lot of fixed costs, it's a challenge to get into a more appropriate model. [They have to be small, lean and nimble. We've got a great product and it's one for the channel," Ingari said.

The company hit a high of 300 employees last year but is now down to about 30, Ingari said. The last round of layoffs happened Tuesday. He would not say how many jobs were cut at that time.

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A corporate customer contacted by CRN said Wheelhouse informed him of the changes Wednesday. "They said they're discontinuing their professional and hosting services," he noted. He expects the company will sell off its software. Ingari reiterated that the company is trying to get funding to remain a software company.

Both CRM as a software category and the ASP business model have been under fire for some time, with analysts predicting consolidation on both fronts.

Ingari maintains that the part of the market Wheelhouse is attacking,helping customers wring benefits from existing CRM implementations,remains strong.

"We're trying to help people get value out of their Siebel, Oracle and E.piphany systems ... that's very active space but it's a very tough environment. People are slow to buy, there's a lot of window shopping, a lot of proofs-of-concept, but people are extremely excited about our product," Ingari said.

While the company boasted of several Fortune 100 accounts, including J.P Morgan, Eastman Kodak and Staples, it had struggled to find continued financing for the past year, several sources said. They estimated the company had burned through more than $70 million in cash in its lifetime.