Tech Industry

Microsoft, C&W team on hosted business software

The software giant and telecommunications firm Cable & Wireless announce an alliance with Compaq Computer to tackle application hosting for small and medium-sized businesses.

Software giant Microsoft and telecommunications firm Cable & Wireless today announced an alliance with Compaq Computer to tackle application hosting for small and medium-sized businesses.

United Kingdom-based Cable & Wireless, which previously struck a $500 million deal with Compaq to develop data centers, said it will remotely host, manage, install and support Microsoft products, along with additional business applications, using server, storage and PC hardware from Compaq.

The first service offered by the triumvirate will feature the Microsoft Windows 2000 operating system, Microsoft Office 2000 productivity software and Microsoft Exchange messaging tools. The service will be remotely hosted from Cable & Wireless data centers and will initially be available to businesses in the United States and the United Kingdom by July. Rollout to the rest of Europe and the Asia-Pacific region will take place in the next year, the companies said.

A number of major technology companies have recently jumped into the application service provider (ASP) market, providing a wide range of hosted services, equipment and data center capabilities. While the ASP market is still in its infancy, it is expected to grow to $2 billion by 2003, according to market research firm International Data Corp.

ASPs host software so customers don't have to install and manage it themselves. People access the software from their desktops, and it is typically remotely monitored from a data center. Customers pay outside providers to run everything from complicated enterprise software installations to more common desktop applications, which are often difficult to maintain.

Compaq and Microsoft recently sunk $100 million in Web hosting firm Digex. Digex, which manages and supports Web sites and serves as an ASP, committed to using Compaq and Microsoft products and services as part of the deal. Microsoft has also made equity investments in Corio and MarchFirst (formerly USWeb/CKS), which were both early to the ASP market.

As part of today's agreement, Microsoft said it will provide marketing, product and support professionals who will work on the development of future joint application hosting services. Additionally, the services eventually will be available over a variety of wireless devices such as mobile phones.

The three companies also said they plan to offer other business applications for rent, such as customer relationship management (CRM) software, which automates a company's sales, marketing and call center needs, and financial, accounting and human resources applications. Companies providing software for those services were not named.

Customers will be charged on a monthly per-user basis, which will include software upgrades, security, training, customer support, and data storage and backup, the companies said. Specific pricing details were not disclosed.