Virtualization startup Propero thinks big

Desktop virtualization vendor to release workSpace 5.0

Desktop virtualization startup Propero is due to release version 5.0 of its workSpace virtualization software Monday. The software enables users to access any application from any computer in any location, according to Propero's co-founders, helping companies to significantly lower their IT costs. The startup is also to announce that European investment bank Dresdner Kleinwort Wasserstein will roll out workSpace to 7,000 employes worldwide.

"We provide a single management point for a hybrid of applications," Steve Peskin, Propero's co-founder and co-chief executive officer, said in an interview Friday. The company doesn't believe corporations will virtualize all their applications, but will instead maintain a mix of local, Web-based and centralized software.

"Our strategy is to build a big software company," Peskin said. "Our biggest competitor is buy versus build," meaning whether corporations opt for workSpace or develop virtualization capabilities inhouse.

Peskin estimates that the average user costs their employer around $800 annually in what he terms "adds, moves and changes" in relation to their computer, for instance, changing location and needing a new PC to be set up for their specific needs. Using workSpace, users can log on to any machine and have it automatically configured so it looks and acts like their own PC. Companies can reduce the number of adds, moves and changes from four per year to one, saving $600 per employee, he said.

Propero's workSpace software consists of three pieces -- Analyzer, Manager and Server. The Analyzer component enables companies to determine what applications their users are running and how they're deploying them as well as how those applications behave, according to Peskin. The Manager piece virtualizes the company's IT application infrastructure, delivers the applications to users wherever they're located and configures the applications in a personalized way. The Server piece enables the company's IT department to centralize all operations, including security, management and load balancing. Propero uses a subscription model for its software, with all three pieces of workSpace costing around $20 per user per month, Peskin said.

Co-founders and Co-Chief Executive Officers Peskin and Robin Crewe established Propero in late 2000 in the U.K. The company came about as a result of two challenges Crewe received while deputy chief information officer at what was then known as Dresdner Kleinwort Benson.

Crewe was asked to come up with a way to drastically reduce the amount of money the investment bank was spending on IT as well as making the organization's systems more manageable pending a merger, later abandoned, with Deutsche Bank, Crewe said in an interview Friday. Meanwhile, Peskin was working at the company he founded, Pontis Consulting, advising financial services companies on integration projects or as he joked to his children "robbing banks for a living." Crewe was one of Peskin's largest customers.

Crewe came up with a way to solve both of his problems with a plan to create desktop virtualization software that would provide organizations with a single management point for applications while enabling users to access applications securely from any machine, anywhere. He went to Dresdner management with the plan and asked for £20 million ($35.3 million) to develop the software. They said they'd give him £2 million pounds to come up with a proof of concept. Crewe left the investment bank to found Propero with Peskin who'd sold off his consulting business.

Dresdner worked on the proof of concept to develop its own inhouse product, but it has now abandoned that effort in favor of Propero's workSpace, according to Crewe, as the bank concentrates on its core business, not developing software infrastructure. Dresdner's New York operation will go live with workSpace in February 2006 with 1,500 users, Peskin said, with the software being rolled out over the coming year to all 7,000 users.

Back in 2000, Crewe and Peskin took the virtualization software idea to 3i Group, the largest early startup venture capitalist in Europe, and to Catalyst Fund Management & Research, a U.K. VC focused on the financial sector. The companies funded what became Propero, a Latin verb meaning to accelerate. To date, Propero has received £11 million in funding from 3i and Catalyst.

Last month, Propero opened its U.S. headquarters in New York. "We are potentially looking at U.S. investors," Peskin said. "When we gain traction in the U.S. market and we start to scale rapidly, we'll begin to look at financing options." The company currently employs 35 people, with seven in the U.S. Peskin expects headcount to double over the next 12 to 15 months with all the growth taking place in the U.S. "The U.S. represents 60 to 70 percent of the potential market for us," he added.

The startup already has a strong partner in IBM. The IT giant is also a workSpace customer, having deployed it to 4,000 staff in Europe, the Middle East and Africa. IBM is in the process of setting up what it terms a "human grid" across its Integrated Development Centers, according to Peskin, so that any employee can support any customer.

Propero has seven customers to date, with the other publicly named firms being H.J. Heinz Co. with 5,000 workSpace users in 23 European sites, and American Express Co. with 6,000 workSpace users in Europe.

Looking ahead, Propero is investigating how best to provide virtualization to facilitate access from non-PC devices including PDAs (personal digital assistants) and mobile phones, according to Peskin. The company also intends to make a P-to-P (peer-to-peer) announcement next year, Crewe said.

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