NaviSite Focuses On Solution Sales

"The NaviSite brand is a little beat-up, as are most companies in [the managed hosting space. But I think the services they bring, the [financial support Compaq [Computer and others are showing them, and their commitment to us are all positive indicators that they are positioned to come through this," said Mark Sacco, enterprise information portals practice director at systems integrator Granitar, Framingham, Mass.

NaviSite, based here, said its new strategy supports both direct and indirect sales through channel partners.

Steve Kirchoff, executive vice president of sales and marketing at NaviSite, said the program addresses a shift to solution sales from transactional sales. "We are moving away from transactional outsourcing to augmenting the customer's environment with the current systems integrator vs. acting as an outsourcer," he said.

The company now has a three-tiered sales strategy: working direct with some existing customers, engaging midtier systems integrators, and working with Hewlett-Packard/Compaq solution providers through an existing relationship with Compaq.

NaviSite has had its share of financial woes, posting a second-quarter loss of $26.8 million. In December, NaviSite received a $65 million financing commitment from parent company CMGI and Compaq.

The new program also features an "always on" managed hosting solution that will serve as the backbone of the channel program. So far, about 20 partners have signed up for the program, Kirchoff said, adding he expects NaviSite over time to generate 80 percent of revenue from the channel.

IT consulting and engineering firm Oxford Global Technologies, a NaviSite partner specializing in Oracle applications, said it has seen a surge in customers signing up for hosted applications in an effort to save money. Currently, the Beverly, Mass.-based company has a handful of customers transitioning to a hosted NaviSite solution, and about 50 more are upgrading applications.

"We have about 50 customers that will lose support for Oracle 10.7 in June and are looking at [using a hosted solution vs. having to worry about spending $200,000 on hardware as well as having to retrain their staff to support 11i," said Oxford CTO Paul Campbell.