In 2000 a company that wanted PeopleSoft or SAP had to buy servers, licenses and a team of consultants to make it run. Corio, of San Carlos, California, offered to rent it to them instead. It ran the software in its own data centers and customers reached it over the network for a recurring fee. The idea had a name, application service provider, and in the spring of 2000 Wall Street was eager to back it.

Big Software, Small Budgets

Corio started in 1998. It hosted applications from PeopleSoft and SAP for human resources, finance and manufacturing, and from Siebel Systems for sales. A midsize company could get the same systems as a giant without building an IT department to run them. Corio set up the software, kept it running and charged a recurring fee. The pitch sounds like today's cloud software. The hard part was that each customer still needed its own setup, which made the work slow and costly.

A Dot-Com Price, an IBM Ending

Corio priced its offering at $14 a share in July 2000, just after the dot-com peak, and listed on Nasdaq as CRIO. The timing was rough. Many young customers ran short of cash in the downturn, and the stock sank as the market for application service providers shrank. Corio kept going under chief executive George Kadifa. In January 2005 IBM agreed to buy the company for $182 million in cash, or $2.82 a share, to build out its own hosted software business.

Cover: Houses at Murnau, Vasily Kandinsky. Art Institute of Chicago, public domain. Chosen for a row of houses (software you rent instead of own).