USinternetworking

USinternetworking, commonly abbreviated as USi, was a United States application service provider founded in January 1998 by Christopher R. McCleary, Chris Poelma, and Stephen McManus. The company emerged during the early commercial expansion of the Internet, when businesses were beginning to consider accessing enterprise software remotely rather than installing and maintaining applications entirely within their own facilities. USi offered hosted business applications delivered through the Internet or a private network connection. Its commercial model combined an installation charge with a recurring flat monthly fee, positioning the company as an outsourced alternative to conventional in-house software deployment and support. The company attracted early investment from Grotech and US West and pursued a merger with PSINet in February 1998, although that proposal was rejected. In May of the same year, it signed a lease for a 24,000-square-foot office, reflecting the infrastructure and operating ambitions associated with the application service provider model. USi expanded its technology relationships during the dot-com boom. In April 1999 it became a certified BroadVision application service provider, and in November 1999 it announced an agreement to develop Microsoft Office 2000 as an online service. These developments placed the company within the first generation of businesses attempting to make major commercial software available as a hosted service. USinternetworking became a public company through an initial public offering on April 9, 1999. Its shares experienced a sharp first-day rise, a performance characteristic of the late-1990s technology market. The company continued to pursue expansion after the IPO, including its August 2000 acquisition of EnableVision. Leadership changed during this period: founder Christopher R. McCleary left the chief executive position in July 2000 and Andrew Stern became chief executive. The collapse of the dot-com market materially weakened USi's position. By July 2001, its shares were trading at approximately one dollar, according to the cited historical account. The company filed for bankruptcy protection in January 2002. It emerged from bankruptcy in May 2002 with financing from Bain Capital and through a merger with Interpath. The post-bankruptcy business continued to develop its hosted-application capabilities, and Stephen A. Mucchetti was appointed chief operating officer in September 2003. In June 2004, USi acquired Appshop in a transaction reported as being valued between $40 million and $50 million. USinternetworking ultimately ceased operating as an independent company when AT&T acquired it in October 2006 for $300 million. The acquisition marked the absorption of a specialist application-hosting provider into a much larger telecommunications and enterprise-services group. USi's history illustrates both the early promise of the application service provider model and the financial pressures faced by Internet companies that expanded during the dot-com boom before the market downturn.

USinternetworking was established in January 1998 by Christopher R. McCleary, Chris Poelma, and Stephen McManus as an application service provider. Its business addressed an emerging demand for remotely hosted enterprise software. Rather than requiring customers to install and operate every business application on their own premises, USi delivered applications through the public Internet or private network connections. Customers paid an installation charge and a recurring flat monthly fee for access to the hosted services. The company received early backing from Grotech and US West. In February 1998 it explored a merger with PSINet, but PSINet rejected the proposal. USi continued building its operating base and signed a lease for a 24,000-square-foot office in May 1998. The company expanded its commercial and technology relationships during the Internet boom. On April 26, 1999, it became the first certified BroadVision application service provider. Later that year, it announced an agreement to develop Microsoft Office 2000 as an online service. USinternetworking went public on April 9, 1999. Its shares rose substantially on the first day of trading, but the market environment changed sharply after the technology bubble began to unwind. In July 2000, co-founder Christopher R. McCleary resigned as chief executive officer and Andrew Stern succeeded him. The company also acquired EnableVision in August 2000, continuing its effort to broaden its application-service capabilities. By July 2001, USi's shares were trading at about one dollar. The deterioration in the Internet market and the company's financial position led it to file for bankruptcy in January 2002. It emerged in May 2002 with financing from Bain Capital and through a merger with Interpath. The reorganized company continued operating in the hosted-business-application sector. Stephen A. Mucchetti became chief operating officer in September 2003, and USi acquired Appshop in June 2004 in a deal reported to be worth between $40 million and $50 million. AT&T acquired USinternetworking in October 2006 for $300 million. The transaction brought the application service provider's capabilities into AT&T and ended USi's independent corporate history. The company's trajectory reflects the development of early hosted software services, the rapid expansion and later contraction of dot-com-era technology markets, and the consolidation of specialized enterprise-technology providers by larger telecommunications companies.

• 2006

  Acquisition by AT&T

  [1]USinternetworkingen.wikipedia.org

  AT&T acquired USinternetworking in October, ending its independent operation.

• 2004

  Appshop acquisition

  [1]USinternetworkingen.wikipedia.org

  USinternetworking acquired Appshop in June.

• 2002

  Bankruptcy and restructuring

  [1]USinternetworkingen.wikipedia.org

  The company filed for bankruptcy in January and emerged in May with Bain Capital financing and a merger with Interpath.

• 2000

  EnableVision acquisition

  [1]USinternetworkingen.wikipedia.org

  USinternetworking acquired EnableVision in August.

• 1999

  Initial public offering

  [1]USinternetworkingen.wikipedia.org

  USinternetworking became a public company on April 9 during the dot-com boom.

• 1999

  BroadVision certification

  [1]USinternetworkingen.wikipedia.org

  USi became the first certified BroadVision application service provider in April.

• 1998

  USinternetworking is founded

  [1]USinternetworkingen.wikipedia.org

  Christopher R. McCleary, Chris Poelma, and Stephen McManus founded USinternetworking in January as an application service provider.

• 1998

  Proposed PSINet merger is rejected

  [1]USinternetworkingen.wikipedia.org

  USinternetworking pursued a merger with PSINet in February, but the proposal was not accepted.

• 1998

  USi leases a 24,000-square-foot office

  [1]USinternetworkingen.wikipedia.org

  The company signed a lease for a 24,000-square-foot office in May as it developed its operating infrastructure.

USinternetworking positioned itself as an application service provider, allowing organizations to outsource the hosting and delivery of business software in exchange for an installation fee and recurring monthly charges.

• Application service provider · 1998

  Hosted business applications

  USinternetworking's central offering was the outsourced delivery of business applications. Customers accessed software hosted by USi through the Internet or a private network rather than operating the complete application environment themselves. The commercial arrangement included an installation charge and a flat monthly fee. This model was an early form of remotely delivered enterprise software and anticipated later software-as-a-service approaches.

• Hosted productivity software · 1999

  Microsoft Office 2000 online service

  In November 1999, USinternetworking announced an agreement to develop Microsoft Office 2000 as an online service. The initiative represented an effort to make a major desktop productivity suite available through a hosted application-service model. The available reference material identifies the agreement but does not provide further details about its commercial launch or long-term availability.

• 2006

  Acquisition by AT&TM&A

  Background

  USinternetworking was an established specialist in hosted business applications, while AT&T was expanding its enterprise technology and network-services capabilities.

  Action taken

  AT&T acquired USinternetworking in October 2006.

  Aftermath

  USinternetworking ceased to operate as an independent company and became part of AT&T.

  Acquisition price. $300 million (October 2006)

  Source

• 2004

  Appshop acquisitionM&A

  Background

  After emerging from bankruptcy, USinternetworking sought to strengthen and expand its hosted-application business.

  Action taken

  USi acquired Appshop in June 2004.

  Aftermath

  The acquisition was part of the company's continued expansion before its eventual sale to AT&T.

  Reported transaction value. $40 million-$50 million (June 2004)

  Source

• 2002

  Post-bankruptcy restructuringStrategy

  Background

  The bursting of the dot-com bubble and deterioration in USinternetworking's financial position led to a bankruptcy filing in January.

  Action taken

  The company emerged in May with financing from Bain Capital and a merger with Interpath.

  Aftermath

  The reorganized company remained active and later acquired Appshop before being acquired by AT&T.

  Source

• 2000

  Leadership transitionStrategy

  Background

  The company was expanding during a volatile period for Internet businesses.

  Action taken

  Founder Christopher R. McCleary resigned as chief executive officer and Andrew Stern became chief executive.

  Aftermath

  USi continued pursuing acquisitions and hosted-application activities before entering bankruptcy proceedings in 2002.

  Source

• 1999

  Microsoft Office 2000 online-service development agreementProduct launch

  Background

  USinternetworking was pursuing hosted enterprise applications during the dot-com-era expansion of Internet services.

  Action taken

  The company announced an agreement to develop Microsoft Office 2000 as an online service.

  Aftermath

  The available source does not establish whether the service achieved a broad commercial launch.

  Source

• 1998

  Pursuit of a PSINet mergerM&A

  Background

  USinternetworking sought to combine with PSINet while both companies were operating in the expanding Internet-services market.

  Action taken

  USi pursued a merger proposal in February, but PSINet rejected it.

  Aftermath

  USinternetworking continued independently and later developed its application service provider business through technology partnerships and acquisitions.

  Source

• 2006

  AT&T acquires USinternetworking[1]USinternetworkingen.wikipedia.org

  M&A

  AT&T acquired USinternetworking in October 2006 for $300 million, ending the company's existence as an independent business.

• 2004

  USinternetworking acquires Appshop[1]USinternetworkingen.wikipedia.org

  M&A

  USinternetworking acquired Appshop in June 2004 in a transaction reported at between $40 million and $50 million.

• 2003

  Stephen A. Mucchetti named chief operating officer[1]USinternetworkingen.wikipedia.org

  Leadership change

  Stephen A. Mucchetti was appointed chief operating officer in September 2003 during the company's post-bankruptcy operating phase.

• 2002

  USinternetworking files for bankruptcy[1]USinternetworkingen.wikipedia.org

  Bankruptcy

  Following the collapse of the dot-com market and a severe decline in its share price, USinternetworking filed for bankruptcy protection in January 2002.

• 2002

  USinternetworking emerges from bankruptcy[1]USinternetworkingen.wikipedia.org

  Bankruptcy · M&A

  The company emerged from bankruptcy in May 2002 with financing from Bain Capital and a merger with Interpath.

• 2000

  Christopher R. McCleary leaves the chief executive role[1]USinternetworkingen.wikipedia.org

  Leadership change

  Founder Christopher R. McCleary resigned as chief executive officer in July 2000 and was replaced by Andrew Stern.

• 2000

  USinternetworking acquires EnableVision[1]USinternetworkingen.wikipedia.org

  M&A

  USinternetworking acquired EnableVision in August 2000 as it pursued expansion of its application service provider business.

• 1999

  USinternetworking completes initial public offering[1]USinternetworkingen.wikipedia.org

  Other

  USinternetworking became a publicly traded company on April 9, 1999. Its stock rose sharply during the first trading day, reflecting the strong market interest in Internet companies at the time.

• 1999

  USinternetworking becomes a certified BroadVision application service provider[1]USinternetworkingen.wikipedia.org

  Product launch

  The company was named the first certified BroadVision application service provider, reinforcing its focus on delivering enterprise applications through hosted infrastructure.

• 1999

  USinternetworking announces Microsoft Office 2000 online-service agreement[1]USinternetworkingen.wikipedia.org

  Product launch

  USinternetworking announced an agreement to develop Microsoft Office 2000 as an online service, extending its application-hosting strategy to a widely used productivity software suite.

1. 1USinternetworkingen.wikipedia.org