Microsoft-Andersen deal signals trend to services alliances

A $1.6 billion ($US1 billion) joint venture between Microsoft and Andersen Consulting announced last week signals a nascent trend of alliances between technology and consulting organisations that will provide an integrated swag of solutions for electronic business, according to an IDC analyst.

"The bar will be raised as companies move towards true business-to-business operations, so these alliances make sense when they can provide a single, integrated and consistent view of the organisations both internally and externally," Merv Langby, senior analyst at IDC, told Computerworld.

Andersen Consulting's expertise at applying knowledge to integrating e-business solutions will bring credence to Microsoft's ambitions in the enterprise space, Langby added.

"Microsoft's applications at the desktop have not yet been optimally integrated with complex enterprise-level applications," he said. "Andersen Consulting will bring the ability to create reusable solutions that stand the strategic objectives in good stead."

Designed with large corporate customers in mind, the $US1 billion joint venture centres on the formation of a company called Avanade.

Avanade will primarily focus on delivering Internet-specific and other corporate software services based on Microsoft's Windows 2000 operating system.

Andersen will also create a new internal unit, called Microsoft Solutions Organisation, 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.

However, Australian e-business companies will have to wait over a year for a local launch of Avanade, according to Gary Cox, enterprise director at Microsoft Australia.

"We are not expecting uptake for 12 to 18 months, unless Andersen Consulting sees the need to fast track," he said.

Cox also denied there would be a conflict of interest between the joint venture and Microsoft Consulting Services (MCS).

"MCS exists to assist customers in deploying technology at a strategic level, and is driven by customer demand rather than revenue," he said, adding Microsoft is keen to pursue similar arrangements with the other "Big Four" consulting firms.

"We currently have a global alliance with Cap Gemini, which is now acquiring Ernst & Young," he commented.

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