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Loss Widens For Onyx

Tuesday was a busy one for Onyx Software Corp. It reported a deepening loss for fiscal 2000, a 101% rise in revenue for the year, and the debut of a new edition of its customer-relationship management software line in tandem with Microsoft.

Onyx, whose software manages sales, marketing, and customer service for midsize companies and divisions of large ones, says it's begun selling an edition of its Onyx 2000 suite that targets large investment-management companies and retail banks. Microsoft sales reps that specialize in selling to financial institutions will work with counterparts at Onyx to sell installations of Onyx Investment Management Edition along with Microsoft platform software, according to the companies. Onyx also plans to offer business-consulting services from newly acquired RevenueLab.

The company reported a $2.5 million loss, or 7 cents a share, for 2000, compared with a loss of $444,000, or 1 cent per share, for 1999. Revenue for the year, however, shot up 101% year over year, to $121.5 million. Onyx says large customers powered sales of software licenses; blue-chip customers include American Express, Wells Fargo, Dreyfus, and Prudential Securities. Onyx installations typically cost about $1 million.

Customers of that size will be important to Microsoft, which strikes sales and marketing deals--often tied to use of Microsoft products--with software vendors in a range of markets. That way, Microsoft gets high visibility for its operating systems, databases, and middleware among customers sourcing apps from an independent software vendor. In December, Onyx launched a developer edition of its software that runs on Sun Solaris, but its production platform is Windows NT and 2000, and the financial edition of the software will only appear in a Windows version, says senior VP Eben Frankenberg.

Microsoft director Stan Julien says the company is "trying to get more aggressive" about pairing its software with CRM packages. In December, Microsoft and Pivotal Corp. signed a similar sales and marketing agreement. Microsoft's CRM strategy, especially for large accounts, revolves around striking deals with independent software vendors and systems integrators that can provide necessary customization, Julien says. Microsoft entered the enterprise resource planning market firsthand with its December acquisition of Great Plains Software, which sells to small and midsize companies that use off-the-shelf applications with little modification. Says Julien, "They lend themselves better to the Microsoft business model."

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