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Making the Leap of Faith

The outsourcing of information technology is nothing new. Huge service providers such as EDS and Computer Associates have offered total computing solutions to big corporations for decades. And big customers of IBM, Compaq, and Dell can command special packages that involve a variety of leasing and outsourced IT arrangements.

Among system vendors, Micronpc.com comes closest to the OIP model; it offers various comprehensive solutions to small and medium-size businesses, including PCs by subscription and Web hosting, designed to integrate with a company's existing IT plan. (See "The Pros and Cons of PC Makers' Service Plans" for more on the services offered by major PC manufacturers.)

By contrast, OIPs take complete responsibility for the nuts and bolts of the IT infrastructure, but on a smaller scale and at a cost far lower than that charged by monster companies like EDS. When users have trouble, from an ugly PowerPoint presentation to a downed network connection, they call one number--the OIP help desk. "Everyone I work with has said that the CenterBeam help desk is great," says Angelique Faul, director of operations at Evans Partners, a public relations firm with offices in San Carlos and Santa Cruz, California, that turned to CenterBeam. "Before, we'd call our computer guy, and it might be two days till he could get here."

So how do you choose a partner that will deliver not only this month, but also years from now? "You want to pick a firm that has strong relationships with larger firms," says Rob Enderle, vice president of Giga Information Group, "so it can survive the consolidation that's going to happen in the market." By that measure, CenterBeam and Everdream--the only two OIPs with a national presence--lead the pack. Based in Santa Clara, California, CenterBeam has struck strategic deals with Dell and EDS, and it secured $115 million in blue-chip investment last November. Everdream, of Fremont, California, claims Hewlett-Packard and Ingram Micro as partners and last September received $50 million in funding from the likes of HP and Siebel Systems.

Among other benefits, these alliances enable CenterBeam and Everdream to deliver on-site service where necessary. Everdream's contract with Ingram Micro's VentureTech Network of VARs gives the company a national on-site service organization. And similarly, through its relationship with Dell, CenterBeam can call on Banctech technicians for on-site service nationwide.

The packages that CenterBeam and Everdream offer diverge in three areas: minimum number of seats, default Internet connection, and networking options. CenterBeam won't support offices that have fewer than ten seats, while Everdream will take on a one-person office. On the other hand, if you opt for CenterBeam's base price of $225 per month for a Dell 600-MHz Celeron desktop, you get a DSL connection and a Lucent wireless LAN setup as part of the package. Everdream's $159 base price includes an HP 866-MHz Pentium III system with a 56-kbps dial-up connection and no local network. XO Communications provides DSL as an option, but Everdream prefers to let its Ingram VAR network make the sale and do the setup for networking. Both OIPs partner with T1 and frame-relay providers.

Other providers that tout similar deals are fast emerging, notably MindShift in the Baltimore-Washington and Chicago areas, and IReadyWorld in the southeastern United States.

These days, even big-company alliances don't guarantee success. CenterBeam's CEO, Sheldon Laube, scoffs at the possibility of business failure but notes, "In the worst case of all, if we disappear, what you're left with is Cisco routers, Dell servers ... the same stuff you would have bought most probably anyway." That may be, although the OIP, not the customer, owns the equipment--leaving a particle of risk that your hardware could be repossessed. That nightmare scenario doesn't seem to bother Appshop's Kulasekaran, who asserts that he'd port the data over to new machines and have everything back to normal "inside of a week."

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