The Internet's failure as a sales channel for many online retailers not only drove numerous dot-coms out of business but also forced a slew of software and service companies to adopt new business models. Privately held OneChannel, an analytical software maker and formerly an application service provider, appears to have weathered the tempest.

OneChannel plans to make its official launch as a software vendor early next year, although it's already started selling products. Many software vendors sell analytical tools as part of larger software packages for managing transactions and other business processes related to direct sales or sales through distributors and dealers. But OneChannel is unique in its focus on analytics that help manufacturers monitor the accuracy of demand forecasts.

The software lets manufacturers set up private hubs to track everything that's going on in the channels, says Laurie Orlov, a market analyst for Forrester Research. "There's not much in the market specifically tailored to help track information in a multitiered demand chain," she says.

As an ASP, OneChannel aggregated sales data from online retailers and sold the analysis of that information to manufacturers. OneChannel's online reports let manufacturers monitor how much the channel has sold, and also help them spot sales trends indicating a product's waning or increasing popularity. The company started focusing on selling its software directly to manufacturers as those online retailers went away and E-commerce became less of a focus as a sales channel for manufacturers, says Karl Hirsch, OneChannel's CEO.

The company is up to version 3 of its Enterprise ChannelMetrics software, which has been expanded to provide analytical data on the performance of all sales channels. The Java-built software, which runs on BEA Systems Inc.'s WebLogic application server, sits on an Oracle data warehouse that extracts data from a customer's enterprise resource planning systems.

The software uses online analytical processing tools from Hyperion Solutions Corp. to perform trend analysis on sales and inventory data, resulting in reports that a manufacturer can use to judge the accuracy of its demand forecasts. Accurate forecasting lets manufacturers match production levels closer to actual demand to avoid excessive inventory levels.

Cisco Systems is using the software in a test with 100 users and plans to roll it out to several thousand over the next year, Hirsch says. An average deployment of ChannelMetrics runs between $250,000 and $500,000.