A couple of years ago, officials at Camarillo-based software-maker eLabor.com (then jeTech Data Systems) decided it was time to transition their time-management and employee-management software to the Internet. The privately held company had built up a successful business since the early 1980s helping employers manage and monitor their employees’ time and workload. But they foresaw an even bigger market if they could offer those services online rather than with a costly software system that took months to install and required support staff. ELabor officials surveyed the online workforce management market and saw lots of small competitors and one giant Microsoft Corp. “We saw these small players trying to go head to head with Microsoft when their tools were already the standard,” said eLabor founder and Chief Executive Michael Edell. So rather than compete with Microsoft Project, the software giant’s resource management package, eLabor decided to build its Enterprise Project system to complement the Microsoft package. It paid off. In August, Microsoft partnered with eLabor, agreeing to participate in the company’s second round of venture funding and to integrate eLabor’s Enterprise program into Microsoft’s upcoming Project 2001. “Microsoft has stepped up and said, ‘This is the company you need for project management software, this is the company to go to,'” Edell said of the Microsoft deal. Since the deal was announced, sales of eLabor’s online management package have exploded, thanks largely to all the media attention it received in the wake of the deal. Edell wouldn’t release numbers, but said August sales have already surpassed total sales for all of 1999. “The eLabor.com product fit nicely into the gaps of our existing ‘Microsoft Project’ without too many overlaps,” said Chris Tibbetts, product manager of “Microsoft Project.” Tibbetts said Microsoft was also attracted by the fact that the product was already completed and could be put out in the market sooner than a copycat product developed by Microsoft. ELabor is still running in the red and Edell said the company doesn’t expect to turn a profit for another 10 to 12 months. In August, eLabor took in $40 million in a second round of financing that included investors Redpoint Ventures, Lehman Brothers and Microsoft.
SOFTWARE—Elabor found that if it couldn’t beat Microsoft, it might as well join it