NEC Steps In With Investment In E-Business Integrator Niteo

Hopes to boost U.S. services, systems integration practice

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NEC, perhaps best known the United States for hardware products, is making another attempt at expanding its services and systems integration business in this country.

NEC recently invested in Niteo, an e-business integration house, to gain a services foothold. Niteo is a wholly owned subsidiary of NEC, which also helped fund Zefer, an e-business services firm that had several Niteo executives, including CEO John Kelly, on its roster. Zefer filed for bankruptcy protection in September.

Former Zefer employee John Kelly is now CEO of Niteo, a subsidiary of NEC.

Investing in Niteo is a step in changing NEC's image."We're known very much as a product-oriented company, but in other parts of the world, we [also offer professional services," said Yuji Ichimura, a manager in NEC's international business division.

NEC, which declined to disclose its total investment in Zefer, has made an undisclosed investment in Niteo that will be adjusted "depending on how things go," Ichimura said.

NEC will provide leads as well as dollars to Niteo, Ichimura said. "If clients want CRM [or other e-business applications, we will introduce Niteo to them," he said.

Niteo's customers said they appreciate the continuity of working with some of the same team members they got to know when Zefer existed.

"It's the same level of quality," said Rhodes Klement, senior manager of Sun Microsystems' Sun ONE user-experience group. After Zefer became Niteo, "we did the Inside Sun ONE portal in under 60 days, which is pretty fantastic."

Klement said Sun executives met with NEC executives as the transition from Zefer to Niteo was under way. "They told us they were striving to keep the same [type of small-company energy" in Niteo.

Dan Lynch, vice president of Internet strategies and development at Cal Fed, began working with Zefer last April. The bank's rules require gathering at least three bids for services; last year, Niteo won a bid to enhance Cal Fed's Web content management.

Now, about half "of Niteo's time is [focused on building the next generation of Cal Fed Web sites," some first created by Zefer, Lynch said.

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