By William Fellows
Two former Novell Inc CTOs have formed CenterBeam Inc and won $20m venture backing to build a business which provides all hardware, software, e-commerce, backup, internet access and security to small business starting at $165 per user. Co-founders include CEO Sheldon Laube, co-founder of USWeb and before that Novell CTO; CTO Glenn Ricart, who was Novell CTO until June (Novell is seeking a replacement); and Marc Eptsein, former CTO of Quarterdeck and once time general manager of Novell management products.
CenterBeam is and end-to-end Microsoft shop. It will sell Office and Exchange based products and manage all its customers’ system from an SMS-based server over dedicated DSL or higher-speed links. It will support other applications where required, though users will buy them from third parties. It is rolling its service out in the Bay Area, San Francisco and San Diego and plans to go nationwide next year. Alpha sites are just coming on stream.
CenterBeam’s value proposition is that small and medium sized businesses with 10 to 100 people do not have to worry about their IT infrastructure and can get on with practicing their core business. They spend $57bn on it currently, according to market researchers. There are estimated to be 1 million businesses within this range. Laube claims that CenterBeam offers more than either ASPs, ISPs or FreePC companies. In fact he counts ASPs as partners. But ask an ASP what to do when you can’t print out a ledger, Laube says, they’ll tell you the printer is not their fault. The company is the first truly free PC for business says Laube, free in cost and free of hassle.
Small businesses Laube says, do not want to be bamboozled they don’t want to have to understand bits and bytes. He says CenterBeam will focus on what people pay for, not on the bits and bytes. It’s not a software play it’s an economic play he says, stressing that it is the rise of the cheap PC that makes the CenterBeam model possible. He estimates that the company can operate PCs at customer sites for some $1,800 a year, much less than the $3,000 to $10,000 often quoted by market researchers. That makes the total cost of ownership much lower than most reports. It won’t repair PCs, printers or other equipment that breaks but will replace them within one day. It will use 10Mbps Lucent wireless LANs for offices, dispensing with cabling requirements.
Laube says that in a way it is like extending the USWeb outsourcing model to smaller customers; USWeb sold to large users with their own IT departments. The $165 per user per month is for a basic 17 screen PC with a 300MHz or 400MHz Celeron. An additional $20 buys a 500MHz chip; another $50 or $60, a laptop. Fault tolerance and fancy printers cost more. Hardware and software upgrades are built into contracts and it’ll also host a public web site for customers. The 32-person company has a direct sales force and will also sell from the web.
