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
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
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.