Andersen Consulting and Microsoft have entered a joint venture valued at $US1 billion to form a separate company to deliver software applications for electronic business, and will also create a Microsoft-dedicated unit within Andersen and embark on joint marketing.
"The alliance that we're announcing . . . really is the last critical piece for us to put in place to address a topic [of] how does Microsoft really pursue the biggest opportunity in the enterprise and the e-commerce marketplace," said Steve Ballmer, Microsoft's president and chief executive officer.
Designed with large corporate
customers in mind, the joint venture centres around the formation of Avanade, as the new Seattle-based, jointly-owned company will be called. Avanade will mainly focus on
delivering Internet-specific and other
corporate software services based on Microsoft's Windows 2000 operating
system, according to the companies.
Under the terms of the agreement, Microsoft will make a cash investment of $US385 million , as well as provide development support and other intellectual capital. Andersen Consulting, in turn, will mainly contribute training, resources, development and services staff.
From the start, Avanade will have 1000 employees, recruited from within both companies, and within three years the company will employ 5000.
The goal is for Avanade to be a $1 billion company in three years. Within 18 months, it will open offices in San Francisco, Dallas, New York, Paris, London, Frankfurt, Sydney, Sao Paulo and Singapore, the companies said.
Andersen will also create a new internal unit, called Microsoft Solutions Organization, dedicated to designing and building business software and services based on Microsoft's enterprise platform, according to Joe Forehand, Andersen's CEO. Around 25,000 Andersen consultants, one-third of the Andersen workforce, will receive training on Microsoft's corporate software offerings, including Windows 2000, SQL Server, Exchange Server, Windows DNA 2000, Visual Studio-based tools and electronic commerce technologies, Forehand said.
A hypothetical example of an ERP
implementation in the 90s highlights the difference between Avanade and Andersen's Microsoft Solutions Organization, Microsoft's Ballmer said. A company moving to ERP might call Andersen to model and customise the ERP software, but the system vendor would then do the actual implementation, Ballmer said. With Avanade and Microsoft Solutions Organization on the scene, Avanade would take the implementation role, he said.