Has Anyone Seen a Red Gorilla?

Online time tracking and billing provider turned application syndicator Red Gorilla is rumored to have closed its doors earlier this month and is facing bankruptcy.

Up-and-coming ASP OfficeTool.com is in the process of working out an arrangement with Red Gorilla to continue operations of Red Gorilla’s time tracking and billing service, which is currently inaccessible to customers, Andrew Garcia, OfficeTool.com director of product strategy, told ASP News on Thursday (Oct 19). “The details are being worked out now. We will be continuing the operations of the Red Gorilla website, and all customer data will remain intact,” he said.

Jeffrey Hunt, VP marketing for Red Gorilla rival OpenAir.com, told ASP News that several recent customers, whom the company calls when a new account is created, are former Red Gorilla customers. “It was actually very strange. There was no announcement, they didn’t communicate anything to their users,” Hunt said. Of those who came to OpenAir, none had received any notice of the shutdown, before or after it happened, he said.

OpenAir’s TimeBills product was a direct competitor of Red Gorilla’s Gorilla Time online time tracking and billing service, though both companies have recently made moves to expand their offerings. “We both started in a similar space, but we’ve since evolved,” Hunt said.

Just last month, Red Gorilla announced a new direction for the company into syndicating applications to large sites much the same way content is syndicated on portals, as well as offline in newspapers, radio and TV. At that time, Red Gorilla founder and CEO John Witchel confidently told ASP News, “The wind is to our backs. It’s a trend, and we’ve identified it early on.”

Red Gorilla was founded in 1999, and launched its first product in December. Red Gorilla began making the move to application syndication earlier this year, inking deals with partners like OpenDesk.com, OfficeMax, Desktop.com, and NetLedger.

“The niche players are going to have a lot of trouble in this market,” NetLedger president and CEO Evan Goldberg told ASP News. “The companies offering a narrow area of functionality are going to have to rapidly ally themselves with larger providers. Small businesses aren’t going to go to 5 different vendors.”

Goldberg was not aware of any communication from Red Gorilla to its partners. NetLedger offers its own time tracking and billing services in its suite as well as core accounting, payroll, and ecommerce capabilities.

“I think that customers need to look carefully at the vendors they choose,” Goldberg added. “We want customers to be confident about ASPs, and though events like this may lower confidence in the ASP model, they need to be aware that there are companies like ours around with strong backing that are going to weather this market.”

NetLedger is backed by investments from ADP, Oracle CEO Larry Ellison, Paine Weber and StarVest Partners, L.P.

Meanwhile, OpenAir has expanded its offerings to encompass a suite for the Professional Services industry, with services for proposal writing, resource management, project tracking, as well as the original time sheet and expense report services.

“It’s hard to understand what their model was,” Hunt said of Red Gorilla. “They gave away their basic service free, relying on upgrades to premium services for revenue. In my experience, that has always been difficult.”

OpenAir offers its customers a license for one seat per organization for free on a trial basis, but charges for its service after that. “We think it’s better to have paying customers now than potential paying customers in the future,” Hunt said.