Progress Software Acquires Allegrix To Accelerate ASP Deployments

Business Wire, June 4, 2001

Business Editors & Technology Writers

BEDFORD, Mass.--(BUSINESS WIRE)--June 4, 2001

The Progress Company Boosts ASP Enablement by Acquiring a Leading ASP

Infrastructure and Managed Services Provider

The Progress Company, a business unit of Progress Software Corporation (NASDAQ: PRGS), a leading supplier of technology for building e-business solutions, today announced that it has acquired Allegrix, a full service application service provider (ASP) Infrastructure Provider headquartered in Santa Clara, California. The acquisition significantly extends the Progress Company's ASPen(SM) (ASP Enablement) program and initiatives for Independent Software Vendors (ISVs) by providing a full range of ASP acceleration services. The terms of the acquisition are undisclosed.

"With this acquisition, Progress extends the original ASPen Program vision of empowering the ISV, to provide the ideal global ASP deployment platform for all packaged application vendors and subscribing end users," said Dave Ireland, president of the Progress Company. "As with Progress, Allegrix's emphasis on supporting partners is unique among its competitors. Furthermore, Allegrix has been a reliable resource for a growing number of our ASPen member ISVs."

Allegrix will continue to execute on its business plan to provide the best managed hosting services for packaged application vendors on Windows, Unix, and Linux platforms by maintaining and extending existing relationships and certifications with companies such as Great Plains, Microsoft, and IBM. In addition, the ASPen program will be enhanced with Allegrix's ASP acceleration services to offer:

-- Hosting Services--addressing the complex managed hosting services necessary
to enable partners to quickly expand their existing offerings with ASP-based
solutions and take advantage of new business opportunities;

-- Empowerment Services--including the key empowerment tools, such as partner
demonstration environments and virtual development environments, that
accelerate the adoption of the ASP model with partners;

-- Education Services--including the business assessment information,
interactive tools, and demonstration environments necessary to educate partners
and end-user companies in the value of the ASP model to their businesses.

"We built Allegrix on the sole premise that the thousands of existing ISVs and Solutions Providers are absolutely critical to making the ASP model successful. We have clearly demonstrated that the channel-powered ASP model benefits both the ISV partner and the end-user customer," said Chris Clabaugh, Allegrix's president and chief executive officer. "By combining resources with Progress, we can now make a more significant impact in the marketplace as a whole--with the thousands of Progress ISVs as well as the tens of thousands of other channel providers."

In addition to providing cross-platform managed hosting services, Allegrix will become the deployment services of the ASPen Program. Clabaugh will serve as a vice president of the Progress Company, responsible for deployment, including infrastructure contracts, education and tech support for ISV customers' applications. Both Progress and Allegrix have focused on developing Service Level Agreements (SLAs) that embody best practices for out-hosted and co-located applications. In his new role, Clabaugh will continue to refine the traditional Allegrix offering within the Progress Company as well as extend the ASPen Program. ASPen and Allegrix executives expect both Progress and non-Progress ISVs to benefit from the merged service offerings and resources.

"Progress was among the first vendors not only to recognize the importance of empowering ISVs to become ASPs, but to deliver a comprehensive set of ASP-enabling products and services as part of a dedicated ASP program," said Clare Gillan, group vice president, New Business Initiatives at IDC. "Allegrix's service offering also helps ASP-enable ISVs and will be a strong complement to Progress' other ASP support programs and technology."

Gillan was the first industry analyst to identify and brand the "application service provider" trend and is widely recognized for her on-going analysis of the service provider market. IDC currently expects the ASP market to grow from $1 billion in 2000 to $24 billion in 2005, representing a compounded annual growth rate of 89 percent.

In the Executive Summary of a recent Summit Strategies report on ASPs, analyst Laurie McCabe writes, "In order to make the most of this opportunity for growth, ASPs must continue to improve their services: they must develop, streamline and automate their processes for managing the service side of the delivery equation."

Allegrix customers agree that well-executed managed services make a tremendous difference. adidas America's chief technology officer, already working with Allegrix and one of Progress' ISVs, Cutsey Business Systems, noted the potential for international businesses seeking global-class support.

"At adidas America, we have launched our U.S.-based, out-hosted B2C, eCommerce initiative using Allegrix as the infrastructure service provider," said Dieter Shoenegger, chief technology officer for adidas America. "However, when a million or billion dollar B2B operation has to be supported and an ASP application attempts to go global, the challenges increase along with the opportunities. Adding more Progress experience in local and international service and support will help the ASPen/Allegrix service offering grow rapidly to address the emerging international ASP market."