March - 2001 - issue > Cover

Sierra Atlantic Founder Raju Reddy explains that “business applications increasingly flow through multiple point solutions” -- made by Oracle, Seibel, i2 and so on. As this occurs, “the asset value shifts to the connectivity of these applications.” And it is this connectivity that Reddy's company seeks to provide.


Founded as a consulting company in 1993 and turbocharged by $17.5 million in venture capital in 1999, Sierra Atlantic specializes in building what it calls “application networks” for large enterprise customers. These networks institute processes that allow various applications to “talk to each other” during tasks such as order management, marketing campaign management, or collaborative design. The goal is to both lower the costs and speed up solutions typically executed by large consulting firms. According to Reddy, application networks make up a whole new sector.


But lots of companies are trying to provide business application solutions. Many claim to be able to offer a “complete solution.” Enterprise software companies like PeopleSoft, and even some ASPs like Jamcracker or Asera, suggest that they offer businesses an integrated applications suite. But recently appointed Sierra Atlantic CEO Marc Gallo is skeptical. He questions, first of all, whether these “integrated solutions” work at all, and whether they are effective in the real world. Typically, more established companies have already built strong relationships with the likes of Oracle or Seibel. Their systems are all unique and too complex to overhaul with a packaged solution. “The world is not standard,” says Gallo.
Hence, Sierra Atlantic offers a partially customized solution. Reddy adds that ASPs and enterprise software companies that claim to provide a totally integrated solution can only really appeal to relatively small customers. The larger firms that his company targets have business logic that is simply too complex.


So what's next? Reddy speaks of an IPO before the end of the year, but cautions that market conditions aren't great. Certainly the big five consulting firms will be tough to dislodge as the top dogs in the field of optimizing enterprise application systems. But because Sierra Atlantic doesn't actually build the applications themselves -- it merely enhances existing systems -- it may be easier for the company to navigate the crowded market than it would be for a pure software company.
A credit to the company is the fact that it has grown largely organically on limited (by today's standards) venture capital and a solid customer base that include companies such as Kellogg, Intel, Iomega, and Boeing. This is not a company that will suddenly evaporate. But, inevitably, it will be a challenge for Reddy and Gallo to develop Sierra Atlantic into the kind of enterprise whose market penetration and success will allow it to prosper as a public company.