By Nick Patience
The latest venture of Farzad Dibachi, the ex-Oracle Corp executive who sold his Diba internet appliance software company to Sun Microsystems Inc in August 1997 was launched yesterday, and Dibachi apparently plans to stay with this one for the long haul as chairman and CEO.
Niku Inc is an early player in the professional services automation (PSA) space, a new three-letter acronym to go alongside the familiar ERP and CRM (customer resource management) markets, which overlap this one slightly but not so much that a new niche cannot be carved out, says Niku’s VP marketing Anil Gupta. The target market for this set of software and services are companies that capture, manage and sell intellectual assets, such as IT and management consultancies, PR, architecture and law firms and the millions of small independent consultants out there.
Niku has launched two software suites and a business portal. Niku for IT consulting includes sales and marketing; and resource, engagement, service level, practice and knowledge management modules. Niku for Internal IT comprises business and case analysis, resource and project management; problem tracking and resolution; progress reports; and knowledge management. Gupta acknowledges that there is software out there that does one or more of these functions already, but not all and definitely not integrated, he says. Gupta reckons the PSA market is in roughly the same situation as the ERP market was around 1993, before the integrated software players took control.
The business portal part of Niku’s business (www.iniku.com) is aimed squarely at small consultancies which compete against the large consultancy firms, and it offers them a shared disk where they can exchange files with their colleagues and suppliers, marking some files private, while leaving others public. Niku has also partnered with news providers and is negotiating with analysts firms to provide reports at the web site. It also enables small consultants to build their own web site in the style of iNiku. The service will cost $20 per month, regardless of how much content consultants look at, says Gupta. Niku is looking to have signed up 250,000 subscriptions to iNiku by the year-end and at least 400,000 by mid-2000. Its second round of funding, which it is the process of closing, will enable it to invest $40m-$45m in the portal alone, claims Gupta. In addition, Niku has signed with Sun and Sybase Inc to offer training via the portal for Java and Sybase products, and it will offer bulk emailing and other service required by small consultants. The iNiku site is in pilot for launch in May.
Niku for IT Consulting 1.0 was actually launched in December 1998 and the first customers include Sybase’s 1,200-strong consulting arm, SE Technologies , an SAP, Baan and i2 shop with 500 consultants and Neptune Technologies, a small consultancy. Partnerships were also announced with AvantGo, PC Docs/Fulcrum and Frontier GlobalCenter.
Niku is also writing APIs to link to PeopleSoft and SAP for large clients, Great Plains Software for mid-size business and Intuit’s QuickBooks for small consultancies using the iNiku site. The software was all produced by the in-house team of 30 or so developers over the last 14 months and the only part of the portal that comes from outside is some of the content. Version 2.0 of the consulting and version 1.0 of Niku for Internal IT will arrive in the second quarter, says the company.
Niku will record revenues of $800,000 in the first quarter and about $11m for 1999 as a whole and expects to be profitable by the fourth quarter. The company has about 60 employees now and plans to have around 115 by the fourth quarter. Based in Redwood City, it expects to move a few miles north to larger premises somewhere like Foster City within a few months, says Gupta. The seed and first rounds raised a total of about $8.5m. Dibachi has gathered an illustrious board and experienced management team. Among the board members are Bill Raduchel, Sun’s chie
f strategist and John Chen, Sybase’s chairman and CEO. Gupta and Niku’s VP sales Ken Johnson are ex-Baan while VP corporate development Harold Slawik is a former senior counsel at Sun. The company is still looking to fill various positions, including VP business development and an IPO is, predictably enough, the long-term plan. Incidentally Niku means do-gooder in Persian (Dibachi’s family left Iran for California in 1979) or high-grade beef in Japanese, so take your pick as to which is the more applicable here.
