Peter Hannam, CEO of Hampshire, UK-based CobWeb told ComputerWire: The acquisition gives us an additional 200 customers, and 3,500 Microsoft Exchange seats, which means we now have the critical mass of 10,000 Exchange seats, and makes us a profitable at an operating level.
NetStore decided to sell off its SME business to CobWeb since the division was making a loss. In a statement, NetStore said: Despite significant cost reductions our conclusion was that this business will continue to make losses due to a lack of scale. NetStore also said the disposal would reduce the company’s revenue by 500,000 pounds ($800,000) and boost its net profit by 200,000 pounds ($320,000).
However, Hannam said the NetStore business gives CobWeb additional revenue of between 1m pounds ($1.6m) and 1.5m pounds ($2.4m), generating total revenue of between 3m pounds ($4.8m) and 4m pounds ($6.4m) with a total of 40,000 customers including Travel Management Group.
CobWeb delivers its Microsoft Exchange application as a one-to-many ASP service, whereby it hosts the software and delivers it on a rental basis to end users with between 20 and 50 seats who access the same application with minimal bespoke configuration. Hannam said that combining the two operations will enable CobWeb to effectively wrap up the UK market for hosted Exchange services.
He said he also expects the company to generate new revenue streams in the medium-to-large-enterprise sector with the launch of Microsoft Exchange 2003 later in the year, which will enable better security functionality through secure socket layer (SSL) encryption, as well as support to mobile devices, and archiving services.
Source: Computerwire
