The packaged offering gives Corio customers a seamless connection between customer-service and back-office applications. Octane 99 has four components: business-process guidelines; access to the Web, E-mail, chat, fax, and phone systems; a graphical user interface management tool for application design and business modeling; and business-intelligence functionality.

Analysts say the agreement lets Corio offer customers one place to go for all their customer-relationship management and back-office applications. "Being able to buy all your applications from one service provider could be very attractive to some customers," says Ben Tanen, associate analyst at Giga Information Group.

The PeopleSoft-Octane offering also gives Corio a chance to "up-sell" its existing customers to a more comprehensive service, Tanen says. He expects Corio to add sales-force automation and decision-support applications, as well as data warehousing, to its portfolio.

Application service providers such as Corio are attracting more attention from large companies. "If an ASP can offer applications such as PeopleSoft to us faster and cheaper than we could do it ourselves and still provide the reliability and scalability we need, then we'd be interested," says William Wilson, CIO at Marsh Inc., a $4 billion insurance brokerage in New York.

But the requirements of large, international companies like Marsh may still exceed Corio's capabilities. Corio hosts applications using a WAN, but hosted applications accessed over the Internet from companies such as Oracle BusinessOnline might be more conducive to a large company's needs, says Lauri McCabe, a senior analyst at Summit Strategies.