WBT Systems, the Irish-owned supplier of Internet-based computer training systems, is planning to raise between $12 million (€11.86 million) and $18 million in a third round of venture capital funding by mid-2000. WBT already raised $5 million earlier this year, when venture capital firm 3i took an undisclosed stake in the company. This money has been used primarily to expand WBT's sales and support activities. According to recently appointed WBT president, Mr Peter Zotto: "Most of our corporate revenues are currently coming out of Europe, and we are just gaining a foothold in the US, which accounts for around 30 per cent of sales. We plan to focus more on the US, and increase this figure to between 50 per cent and 60 per cent."

Mr Zotto was speaking during a visit to Dublin last week. Since his appointment last October, Mr Zotto, formerly a senior executive with Compaq, has been examining WBT's customer base and revenue model.

"WBT started by focusing on higher education, but now the corporate market is growing at a triple-digit rate. There is huge demand for technical, certification compliance and sales force automation training. The market has suddenly become very exciting," Mr Zotto says.

WBT, which employs 70 people between its Dublin, Boston and San Francisco offices, provides the basic platform that enables computer-based training. It provides the interface, while content providers furnish the training modules.

WBT, in keeping with many of its software counterparts, is in the process of changing its revenue model. From being mainly licence-based, where payments are once off, WBT is moving towards a service-based model, where customers initially receive the software free, but over time they will pay for additional usage and service.

Mr Zotto says he expects WBT, which is still non-profitable despite nearly $10 million in sales this year, to turn a profit by the end of 2001.

"This is a relatively conservative plan, we are starting to move much faster than that. Since we changed the revenue model, our partners have been much more excited about us. Within the next three years, I think we could be a $50 million-a-year company," Mr Zotto says.

The cash flow cost of changing the revenue model has been relatively small because WBT, as a private company, is not subject to the same stringent financial reporting patterns as its publicly quoted counterparts.

Now large contracts won by WBT can be more easily measured as long-term revenue propositions, rather than one-off bulk payments that have to be evenly distributed over the lifetime of the contract.

Partnerships with content providers, technology companies and professional training organisations also feature large on WBT's horizon.

"We don't think of people taking courses online, but in conjunction with other learning methods. For example there might be an opportunity to tie up with a bookstore that will offer a free online tutorial with every hard copy of the book," Mr Zotto says.

Macmillan Education & Training has agreed to co-develop Internet-based training courses using WBT's TopClass software. The idea is to host an instruction-support website for trainers and teachers and use the system to create customised courses for colleges and corporations.

WBT is also beginning to look into the area of wireless connectivity.

"The merging of wireless communications, the Internet and satellite technology opens up huge potential for lots of training applications. Take the example of an engineer on the road, who can access certified training and support online by simply calling up a prompt similar to the Microsoft Wizard," Mr Zotto says.

Bringing this scenario a step further, Mr Zotto points to the need for valuable information to be presented and accumulated in a more organised fashion than the ad hoc approach currently characteristic of the Internet.

"The Web is an aggregator of information, but its underlying architecture needs to be expanded. Content providers have to provide stuff at granular levels, and then we can provide the platform for the interface, and price and delivery mechanisms."

WBT currently claims 600 sites and two million users worldwide. Founded in 1995, its flagship clients include a number of large organisations including Dow Chemical, Bayer AG, First Union Bank and the State University of New York.

It is also understood WBT has just signed heads of agreement to provide one of Europe's largest telecommunications equipment providers with its training software.

On his appointment, Mr Zotto was earmarked as the man to bring WBT forward amid speculation the company was losing its focus. He was involved in the restructuring and divestiture of Digital Equipment Corporation's manufacturing business after it merged with Compaq this year.

Mr Zotto says WBT's Dublin-based development centre will remain located here despite the company's focus on the US market. "We've been fortunate enough to attract very good engineers to the company, and the software development environment here is excellent."

WBT started out as a UCD campus company, founded by academic and entrepreneur, Mr Dennis Jennings. Businessman Mr Tony Kilduff and a number of smaller private investors also hold stakes in the company.

It developed a suite of software that manages distance learning and education which is provided over the Internet by client companies.