Technology service provider Andalon.com in Amherst has closed its doors, citing an over-extended business plan and a lack of money to fund it.
"The company went in too many directions at one time," said a statement from the company's investor group.
The move is a sudden turnabout for a company that proclaimed itself a fast-growing success story just last October. As an "application service provider" or ASP, Andalon participated in the booming business of hosting software for clients over network connections.
Robert E. Roth, a former HSBC executive, headed a group to take over management of Andalon in January. At that time, the company had hoped to reorganize Andalon and recall its approximately 40 laid-off employees.
Instead, Andalon ran out of time and money and discontinued operations, the statement said.
However, some clients said their services remain connected for the time being.
"We have to find another provider," said Carol Kostyniak, director of a coalition of Buffalo private schools. The group, Buffalo Independent Secondary School Network or BISSNET, had hired Andalon to run shared software over a computer network. BISSNET is used by about 7,000 students and teachers.
"The good news now is, there are a lot more people we have to chose from," Kostyniak said. More companies are jumping into the ASP arena, perhaps contributing to Andalon's troubles.
CTC Communications, which sells telecommunications services in Buffalo, announced the opening of its data center last year, combining computer hosting services with communications links.
Although the data center is located in Massachusetts, the speed of data communications means centers can compete far from their home area, said Bob Hanaka, branch manager of CTC in Buffalo. With fiber-optic links being installed, "it's going to be like we were right next door," he said.