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FutureLink, Compaq cut equipment deal

Application service provider FutureLink and Compaq cut an exclusive equipment deal and announce a strategic investment by the PC maker.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
Application service provider FutureLink and Compaq today cut an exclusive equipment deal and announced a strategic investment by the PC maker.

Irvine, Calif.-based FutureLink plans to use Compaq servers and support services in its data centers to host corporate applications for its customers.

Compaq today also made a $2.2 million equity investment in the service provider, earmarked for co-marketing FutureLink's hosted applications, the companies said in a statement.

FutureLink is an application service provider (ASP) that stores software and other applications in a data center, and then rents the software to companies. Such services allow firms to call up applications over the Internet, rather than host them on their own corporate networks.

Corporate spending on ASP services is projected to reach $150.4 million worldwide this year, according to market research firm International Data Corp. (IDC)

In the agreement, FutureLink will initially use Compaq hardware in its Irvine, Calif., and Calgary, Alberta, data centers. It plans to open more data centers next year.

Today's announcement follows a deal Compaq made in November with telecommunications firm Cable & Wireless. At the time, the companies committed $500 million to a program to host applications for small to mid-sized businesses.