, previously dubbed one of Israel's most promising new firms, announced a restructuring plan on Tuesday. Although in October it raised $45 million according to a company valuation of $100 million, the firm is now firing 20 of its 120 employees. In the past, the company employed a staff of 140.
AppStream has developed technology for the delivery of applications on the Web. The technology is based on statistical operating patterns.
Since its inception, AppStream has targeted Internet application-service providers. But the Internet crisis of the past year has left its mark on the ASP market, and the downturn is making it difficult for these firms to acquire expensive technology.
That's why AppStream changed its target market. The firm is now looking to sell its products to large enterprises, especially financial ones, looking to provide applications to distant websites, via the Internet.
In the past, AppStream developed technology to deliver applications to cellular-phones. The company is now totally abandoning this line.
The world's leading Internet ASP company is
(Nasdaq:CTXS). Unlike other Internet firms, Citrix is profitable. In the last 12 months it showed revenues of $476 million, and a net profit of $85 million. Its market value is $4.9 million.
Citrix's technology differs from AppStream's as it is ba'ed on delivering application screens. Citrix itself operates in AppStream's new target market.
An AppStream source claims the company's advantage over Citrix is that its technology requires fewer servers. He added that AppStream has already posted revenues from the sale of its platform, but not enough to show a profit. The source could not estimate when the firm would show profitability.
An AppStream company announcement said the firm's reorganization will allow it to continue operating for at least the coming two years.
In the coming week, AppStream will be holding a support workshop in Israel for its dismissed employees. Consultations as well as assistance in preparing a resume, the referral of workers to human resources companies, and guidance during the current job-hunting crisis will be offered.
Until the recent dismissals, half of AppStream's workforce was employed in the company's Israeli offices, with the other half working in the firm's Silicon Valley headquarters.
In August, 2000, AppStream raised $26 million at a company valuation of $100 million. Two months later it announced that the financing round had expanded to $45 million. Investors in the firm include
AppStream was named the Most Likely to Succeed Startup' at the BayStart BizConferences held in November 1999, and March 2000 in San Francisco.
The company was also selected by
as one of the 10 Private Companies to Watch in 2000, during Red Herring's Venture 2000 Conference held in May 2000.
AppStream was named Best of Show in the NetWorld + Interlop 2000 exhibition held in May 2000 in Las Vegas.
The company has recently made the Hot 100 list of the American magazine
, published on May 15, 2001.
AppStream was founded two years ago by its Chairman and CEO Uri Raz.