RESEARCH TRIANGLE…SmartOnline, which sells on-demand Web services to small businesses, plans to launch a more comprehensive service in three steps beginning this fall.

The company, which raised $3.5 million earlier this year from Atlas Capital, also plans to start hunting for an additional $5 to $10 million it hopes to raise from strategic partners.

SmartOnline said Wednesday that it has signed two well-known names as syndication partners who will offer its services from their Web sites, and, a deal which goes live in mid-August.

The 18-employee company, founded 11 years ago and a pioneer in Web-based business applications and services, “May have been ahead of the curve,” when it first offered the services online in 1999,” says vice president of marketing, Deb Lovig.

“We started selling shrink-wrapped software products for small business, but we could see that the Internet was where this was going. Small business people don’t have time to install upgrades and don’t have in-house tech support. Not having to worry about those things is of great benefit to a small business.” The company says a small business means one with under 1,000 employees.

Lovig tells Local Tech Wire, “We’ve been quiet for a time while we built our syndication engine. Lots of vertical markets, banks in particular, are interested in offering these types of small business applications to their customers.”

Bank clients

The company’s banking syndication partners include BankOne, which recently merged with Chase Manhattan, Cole Taylor in Chicago, and The National Cooperative Bank in Washington, DC. Lovig notes that SmartOnline can develop a syndication platform “with the look and feel of our customer’s site” in 30 to 60 days. “We don’t care if they know it’s from SmartOnline or not,” she adds.

Lovig says banks are interested in using the services to get their small business customers accustomed to using banking services online, which only 15 to 20 percent do now. Smart Online syndicates its services through revenue-sharing agreements.

The company sells the services as a subscription for $29.95 a month or for a one-time fee. Getting a press release written costs from $150 to $450, for example, while creating a human resources manual is $99 with the Smart Online service.

Those services include a business plan builder, easy access, in-depth market research for every state, more than 2,000 business and legal documents and forms subscribers can customize interactively, boiler-plate business letters, a mailing list creator, and email contacts to experts in human resources, law, business planning, global trade, and finance. SmartOnline also hosts data, Web pages, or documents users share with others.
Lovig says one of the key differentiators separating Smart Online’s products from that of competitors is its Wizard interface system that guides even unsophisticated users through each step. “The applications are Wizard driven. Users fill out online forms as opposed to needing to read documents on how to use it. It doesn’t require any training.”

This fall, Lovig says, SmartOnline launches the first of three parts of its comprehensive business services product, OneBizconductor. “It will fill in a couple of critical application areas such as accounting and financial management to create seamless integration between small businesses and their bank or other financial institutions.”

The second version of OneBizconductor is scheduled for release in the spring this year, and the final release in fall 2005.

Additional releases of the new all-in-one small business portal will include more functions in human resources and supply and inventory management from ordering to shipping. While these more advanced services have not been priced yet, they will probably be more expensive than current services. Lovig notes that they will “fit our model of being user friendly.”

She says the company is also conscious of keeping pricing within bounds acceptable to small businesses. “We have some great stories from customers on how much they spent on SmartOnline vs. how much a consultant wanted to charge for the work,” she says.

New Hats

Two former Red Hatters who profited from the company’s huge initial public offering of stock and left the Raleigh Linux developer in 2001 and 2003 respectively, have started a new firm called Specifix.

Founded by Kim Knuttila, CEO, and Erik Troan, Specifix is based in San Jose, CA, but has development offices in Raleigh. Troan, former chief developer, vice president of product engineering and director of marketing at Red Hat, joined the firm in 1995 when it only had five employees and left in 2003. Knuttila joined Red Hat in 1999 when it acquired Cygnus, where he was vice president of engineering, and left in 2002.

Specifix plans to offer versions of Linux that let users customize the operating system and track changes across multiple installations. Red Hat, Novell and other Linux distributors offer support for their versions if a customer doesn’t change anything. The Conary technology lets users track and support parts of a Linux installation they customize. Red Hat CEO Matthew Szulik told one industry publication, “I think it’s great. More people creating open-source start-ups. Those are good guys.”

Smart Online