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To: djane who wrote (53720)9/5/1998 7:35:00 PM
From: djane  Respond to of 61433
 
eFusion Fuses Telephony, IP to Bring Websites to Life [ASND reference]

soundingboardmag.com

By Gail Lawyer

While there may be equipment and software vendors
developing enhanced services for the IP network,
their trials, commercial offerings and acceptance
have been less than widespread. One vendor,
though, has its products in market trials in several
countries and expects commercial offerings of its
software to begin by the end of the year. eFusion
Inc. (www.efusion.com), the Beaverton, Ore.-based
vendor of enhanced Internet telephony software, is
counting on these customers to bring its
developments--such as single-line Internet solutions
and form-sharing between call center agents and
customers--into wider acceptance.

"We're using their marketing machines," says Ajit
Pendse, president and CEO at eFusion, a
two-year-old privately held company that is backed
by Intel Corp. (www.intel.com), Microsoft Corp.
(www.microsoft.com), AT&T Ventures
(www.att.com), France Telecom
(www.francetelecom.fr) and Telecom Italia
(www.telecomitalia.it).

Already carriers such as Internet service providers
(ISPs) Telenordia (www.telenordia.com) in Sweden,
France Telecom and the Netherlands' KPN
Telecom have begun market trials of Internet call
waiting, Internet direct dial and Push-to-Talk service
based on eFusion technology, which allows an end
user to connect to a call center and use his or her
personal computer (PC) to talk to agents without
having to terminate the Internet session. Vendors
such as 3Com Corp. (www.3com.com) and Ascend
Communications Inc. (www.ascend.com) have
become eFusion partners so they can include
eFusion's Enhanced Internet Service (EIS) software
in their voice over IP (VoIP) solutions.
Call centers
and their technology vendors, such as InTrek Corp.
(www.intrek.com) and SoftPlus Inc.
(www.softplus.com), are working with eFusion as
well. Recently, eFusion was named one of Fortune
magazine's 12 "Cool Companies" for its
leading-edge technology and market vision.
eFusion's corporate culture also played a role in that
ranking. The company's conference rooms are
named after Oregon-made microbrewery beers and
every Friday the company stops work at 4 p.m. for
a beer blast, during which employees have a chance
to talk informally.

"It's a way of communication. It's the bond that
brings us together," Pendse says. "We're creating a
no-holds-barred environment."

eFusion is banking on the conventional wisdom that
an IP-centric network will come to dominate the
public switched telephone network (PSTN) over the
next decade. But, Pendse believes, much work has
to be done so today's PSTN customers will get the
same, or better, services over the growing IP
network.

"All the goodness of the PSTN, such as intelligent
networking, we need to transition that onto the IP
network," he adds.

The company's two main product lines are eBridge
and eStream. While other vendors, such as Lucent
Technologies Inc. (www.lucent.com), are trying to
market similar services that tend to only work on
their own equipment, eFusion believes it is at an
advantage because its software was created with an
open system design that will work with the hardware
made by the major switch vendors.


"Their prospects for the future look pretty good,"
says Abner Germanow, research analyst with
International Data Corp.(www.idc.com). "They
seem to have the technology and appear to have
done their homework."

Plus, all that end users need is a multimedia Pentium
computer, an H.323-compliant Internet phone and
Microsoft Windows 95, Windows 98 or Windows
NT workstation.

The ease of use, scalability and ability to interoperate
with a variety of hardware are the main attractions of
eFusion's products, according to some of eFusion's
customers. For example, InTrek Corp.
(www.intrek.com), which provides credit card
transaction processing for other websites, is getting
ready to implement eFusion technology within the
next month.

"They're the most advanced. The others just talked a
good game," says Robert Griggs, InTrek's CEO.

eBridge is comparable to customer premises
equipment while eStream belongs in the central
office. Among eBridge's features are form-sharing,
which allows customer service representatives and
web surfers the ability to fill in e-commerce-related
forms and service applications simultaneously, and
real-time text chat capabilities for customers without
microphones or users of UNIX and Macintosh
operating systems. But at the heart of eBridge is the
Push-to-Talk capability. Push-to-talk allows web
customers, such as ones using the eGolf.com site
(see figure below), to place voice calls to online
merchants at the click of a mouse while still viewing
the website. The Push-to-Talk feature is an
important one, analysts say. In a report on the ratio
of "lookers" vs. "bookers" on websites, Forrester
Research Inc. (www.forrester.com) revealed that
about 75 percent of online shopping carts filled by
web browsers are abandoned before orders are
submitted. The main reason is that users may not be
able to figure out how to complete the transaction, or
are worried about sending personal information over
the Internet, says David Cooperstein, a senior
analyst for telecom strategies at Forrester. The ability
to talk to a customer service representative before
submitting an order may increase the acceptance of
e-commerce and reduce the number of the so-called
"lookers," Cooperstein suggests.

eFusion hopes to use these statistics to sell call
centers on the need to implement its software.

"Customers want the warmth of human interaction,"
says Buzz Schadel, eFusion's vice president of
corporate marketing. "If these companies continue to
go as they are, they're going to have a lot of potential
customers that may call back later on the phone, or
maybe they'll go to a competitor's website that is
easier to use. They'll lose sales because they're not
making it easy."

Forrester's report, "Call Centers Meet the Web,"
predicts that many impersonal websites will come
alive as companies begin to create teleweb sites that
incorporate web-based information with the ability to
contact live call center agents. Teleweb applications
are ideal for financial services and banking,
travel/hospitality and catalog retail industries, as well
as customer support applications, according to
Cooperstein.

Forrester believes that call centers ultimately will
become "customer interaction centers" where calls,
faxes, Internet, e-mail and web pages combine to
answer all customers' questions and take their
orders. Currently, according to Forrester, live agents
in call centers are used 99 percent of the time on the
phone and only 1 percent via e-mail. By 2001,
Forrester predicts that about 5 percent will be using
teleweb applications, with 90 percent on the phone
and another 5 percent on e-mail.

eStream is an enhanced Internet service (EIS)
application gateway that eFusion intends to do much
more than trans-lation between IP and the historical
PSTN. eStream is intended to work with carriers'
existing operations, maintenance and provisioning
infrastructure to complement their billing and simple
network manage-ment protocol (SNMP)-based
network management tools.

"We want to make sure all applications are billable,"
Pendse says.

Some services that carriers will be able to offer end
users as a result of eStream include Internet direct
dial (IDD), Internet call waiting (ICW) and its
related call disposition options. With IDD, customers
can make phone calls without disrupting their
Internet session. eFusion provides a dial pad that
customers connect to their computers so they can
dial out. With ICW, end users don't tie up a single
phone line while online. When a customer receives a
call while surfing the web, a screen pops up to notify
him or her of an incoming call. eFusion call
disposition options (see figure at left) allow the
customer to handle the call in one of several ways.

The call can be accepted over an Internet phone
while the user continues to web browse, or it can be
transferred to another telephone number or directed
to a network-based voice mail system. Another
available option is to have the caller leave a message
on the eStream gateway. Once the message is
completed, the customer can view an online list of his
or her messages, play them back, e-mail messages
to a predefined address to be listened to later or
delete them.

Enhanced services are needed by carriers because
VoIP applications now are simply an arbitrage
scenario.

"Once carriers build up mass, then they'll do
value-added services," says IDC's Germanow.
"Whenever [you] begin offering new services,
especially voice, you can't take a step back," he
adds. "In order to give the customer what they have
today, [you] need to have advanced services, such
as call waiting and caller ID."

Despite the publicly known list of its customers,
eFusion is hesitant to talk about the large U.S.-based
telcos, ISPs and call center operators that have
purchased and are testing its software. Primarily
large foreign carriers have acknowledged their tests
of eFusion's software.

"We have a lot of trials in the U.S., but more are
publicly known in Europe because Europe doesn't
have as many lawyers," Pendse says.

One of its financial backers, France Telecom, will
begin market trials of ICW and Push-to-Talk
applications over the coming months with customers
of its ISP Wanadoo. Telenordia, an ISP owned by
Tele Danmark, Telenor and British Telecom, began
market trials of ICW and IDD with some of its
customers in June. KPM Telecom, the former PTT
Telecom Netherlands, was scheduled to begin using
the eStream EIS application gateway in July to
provide services to its HetNet subscribers. HetNet is
KPN's IP network and services initiative aimed at
promoting Internet usage and Dutch language
content.

eFusion's software is also being incorporated into
other vendors' call center and IP telephony solutions.
Call center vendor Aspect Telecommunications
Corp. (www.aspect.com) plans to bundle the
eBridge single-line technology with its Aspect Web
Agent software solution. By the end of 1998, 3Com
will be incorporating ICW and Push-to-Talk in its
Total Control Solution for VoIP. eFusion made a
similar deal with Ascend in which the EIS application
gateway would be incorporated with Ascend's VoIP
product, MultiVoice for the MAX.

"We're in trials with some of the biggest telcos and
most prestigious call centers worldwide, what we
view as the real trendsetters," Schadel says. "We
think that when one of them gets the service out
there, that will be what the market needs to push
others into more rapid deployment. They'll have a
proven model. They'll see customer acceptance and
how it works."

Currently eFusion has 80 employees throughout 11
offices worldwide. But Pendse says the headcount
will increase as the company is expecting to go
through a substantial growth spurt in the near future.
The company says its primary revenue source will be
the software systems it's developed to bring
enhanced services to IP telephony.

"As the network scales, we get more revenue on
software license fees," Pendse says. Support and
maintenance of its systems will also bring in cash
flow, he adds.

Copyright c 1998 by Virgo Publishing, Inc.
Please read our legal page before using this site.



To: djane who wrote (53720)9/5/1998 7:38:00 PM
From: djane  Respond to of 61433
 
TSC/Petrie on coming acquisitions in tech sector [LU acquisition plans]

thestreet.com

Market Turmoil Changing Tech Financing Strategies

By Kevin Petrie
Staff Reporter
9/3/98 1:43 PM ET

The pogo-stick volatility of many tech stocks is forcing
technology concerns to plot new deal-making strategies.

Investment bankers say start-ups are more likely to fold into
larger enterprises than to go public, and young public
companies with battered stocks might turn into acquisition
targets. In these transactions, expect more cash than stock.

Companies that had been looking to raise capital on the
public markets now are thinking twice.

"We've had clients that said we need to wait a bit, and we've
had clients that said we can't afford to wait and need to go
forward with private capital financing," says David Golden,
co-head of investment banking with San Francisco-based
Hambrecht & Quist.

Indeed, the options for small private companies have
narrowed this summer. With diminishing demand for initial
public offerings, private tech concerns have another reason
to seek being acquired instead of trying to raise capital by
issuing stock on the slip-sliding Nasdaq.

"Today, [these companies are] more likely to find an
acquirer than to go public," says Peter Stoneberg, managing
director of M&A with NationsBanc Montgomery Securities
in San Francisco. The communications and software sectors
are particularly ripe for this type of M&A business,
Stoneberg says.

"There's a lot of wreckage in the communications space,"
Golden agrees. "Lucent [LU:NYSE], for example, could go
on a buying spree." Lucent is likely to do so because of
fundamental forces that are driving consolidation among
builders of communications equipment.

In the data-networking sphere, analyst George Kelly with
Morgan Stanley Dean Witter sees no disruption in the
buying pattern after the market's fall. Large suppliers will
continue to snap up companies that strengthen their array of
products both for Internet and telephone service. Northern
Telecom's (NT:NYSE) acquisition of Bay Networks
illustrates this convergence.


On the public markets, Golden anticipates that Internet
companies such as Netscape (NSCP:Nasdaq) and
search-engine companies might find it "psychologically
harder to spend stock that has fallen" and will recoil for a
quarter or more from making transactions they had
previously considered.

The result is that large companies increasingly might opt to
pay with cash, because their own depressed shares have
lost some value as a currency for doing deals.

Of course, for acquisitions to occur there have to be targets.
"I think the selloff is going to create a few targets," says
Greg Rossman, principal with tech investment banker
Broadview Associates, Fort Lee, N.J. "Some of these
companies [with crushed stocks] are now going to be more
open to M&A activity," Rossman says.


Rossman intends to call prospective clients in a few weeks,
after the market settles, and float the notion of selling at
premiums to their newly battered share prices. If companies
believe their standalone prospects remain strong, Rossman
says, then they likely will wait to consider options. But the
market tumult might force a decision for some companies
already open to the acquisition route.