Open Orchard will be using products from Oracle spin-off Netledger, which is best known for marketing Oracle Small Business Suite in the US but has recently added products of its own. The company had not planned to launch its application service provider (ASP) business in the UK but has been spurred on by BT's interest.
Open Orchard will primarily offer Netledger's Netsuite, which offers modules for financials, purchasing, CRM and e-commerce, or NetCRM, which offers customer relationship management. Yvonne Thomas, chief executive of Open Orchard, said the company will launch in the new year and plans to attract 12,500 customers within five years. She estimates there is a potential market of 1.3 million small- and medium-sized enterprises (SMEs) in the UK.
Offering services over the Internet will relieve companies from the responsibility of managing software and servers and allow them to concentrate on gaining business benefit from the software, Thomas said.
Netledger chief executive Zach Nelson admits there has been some resistance to using ASP services in the corporate market. "SMEs don't need to have their applications in house," he said. "Many lack the expertise in house and just need convincing of the robustness of the ASP option."
This will be the main challenge for Open Orchard, which must convince customers that the offering is not only better than Sage but offers an economical alternative to owning software.
Prices have yet to be announced in the UK but in the US Netsuite costs $4,800 (£3,050) per year for three users and $50 per month for each additional user. NetCRM costs $600 per year for each user, with a minimum of two users.