Andersen Consulting, Microsoft Cut $1 Bil Deal
Andersen Consulting and Microsoft Corp. announced today plans for a new joint venture, and the expansion of an existing relationship, to create an entity for customers seeking to buy, build or integrate large-scale industry applications, including e-commerce offerings, built on the Microsoft enterprise platform and Windows 2000 operating system.
An official announcement pegged the value of the deal at $1 billion and said the new unit will be called Avanade (av'e nad) and, subject to regulatory approval, will deliver Internet-specific and other enterprise platform services based on the Windows 2000 operating system.
The alliance will create a new organization within Andersen Consulting entirely dedicated to designing and building business "solutions" based on the Microsoft enterprise platform.
The deal will also provide joint programs for marketing, business development, and the delivery of services targeting Fortune 500 companies, new market entrants and Internet start-ups, the companies said.
As part of the pact, about 25,000 Andersen consultants will receive enhanced training on the Microsoft enterprise platform, including Windows 2000, Microsoft SQL Server, Exchange Server, e-commerce technologies, Windows DNA 2000 and Visual Studio development system-based tools. In addition, Microsoft product groups will work with both Andersen Consulting and Avanade as the software giant develops next generation technologies and platforms, the partners said.
Joe W. Forehand, managing partner and CEO of Andersen Consulting said, "Microsoft's ability to provide a scalable, cost-effective platform in combination with innovative Web services will help Andersen Consulting create customized e-commerce solutions that take customers to the next level."
Microsoft said that under the deal, the company will contribute $385 million cash to support Avanade, as well as solutions development support and other intellectual capital. Andersen said it will provide intellectual capital, training, resources, solutions development, and other services.
The new unit will be headquartered in the Seattle area, will specialize in developing reusable e-commerce applications, Windows DNA development and application integration, enterprise and Web infrastructures, and data center consulting services, the companies said, adding that within the first 24 months, Avanade will hire a team of more than 3,000 technologists with expertise in Microsoft's products.
Avanade is expected to work directly with, not only Andersen and Microsoft, but also with key original equipment manufacturers and other technology providers. Andersen said it conservatively estimates that potential customer base for Avanade could reach $15 billion by 2002.
Veteran Anderson partner Mitchell C. Hill will be named Avanade's CEO and the board of directors will comprise executives from both organizations, the partners said.
Plans call for Avanade to open additional offices in San Francisco, Dallas, New York, Paris, London, Sydney, Sao Paulo, and Singapore in the next 18 months, and for taking the company public at some future date, the firms said.
The partners also announced today that, as part of an expanded existing alliance, Andersen is creating a dedicated organization of 3,000 business solution architects with deep expertise in Microsoft technologies and products to support the development of industry- specific and cross-industry solutions on the Windows 2000 platform.
Reported by Newsbytes.com, http://www.newsbytes.com