CA, HKT Join Forces in Broadband ASP Deal

HONG KONG (03/10/2000) - Computer Associates International Inc. (CA) and Cable & Wireless HKT Ltd. this week announced the formation of a joint-venture application service provider (ASP) that will offer application-based services to small and medium-sized businesses over C&W HKT's broadband network.

"Given the fact that there's something like 300,000 small to medium-sized enterprises in Hong Kong, it's a tremendous market," said Charles Wang, chairman and CEO of CA, in an interview with Computerworld Hong Kong. "It's a tremendous opportunity (for application service providers)."

The venture, which has yet to be named, will initially offer applications from two of CA's independent business units: ACCPAC, a Windows-based accounting package from ACCPAC International, and MK Manufacturing, a manufacturing resource planning application from the MK Group, CA officials said. In the future, the ASP will also develop applications for inventory control, work-in-process management, finance, payroll, and human resources management, they said.

Officials said that the new company would initially rely on CA software products, including Unicenter TNG, eTrust, Jasmine, and Neugents. However, the venture is free to employ third-party applications as it sees fit, they added.

The announcement of the ASP combines the strengths of one of the world's largest software companies with Hong Kong's largest telecoms firm.

"We're building (this company) on top of their broadband technology, the pipes and the hardware," said Wang. "We have the software infrastructure that can host and manage this environment, which is so important, especially in light of security issues, backup issues, and all of those things."

"We think the combination of the two [companies] is going to be a winner," said Wang, who will join the joint venture's board of directors.

According to CA officials, although the joint-venture company initially will focus on providing broadband ASP services to small and medium-sized companies in Hong Kong, the venture's operations will expand to include China and Taiwan by 2001 and the Asia-Pacific region by 2003.

"It's obviously not restricted only to Hong Kong, it can go more and more global," said Wang.

To make the service attractive to small and medium-sized businesses, the ASP is focused on reducing IT investment costs for users.

"You can basically get on the system, use it, and not have to make the huge investment in hardware, software, so you just get the services you need," said Wang.

But lower overhead costs and easier accessibility may require some compromise.

"In the SMEs, you're going to have to change…your business to fit this (model in certain cases) because you don't have that opportunity to customize everything," said Wang. "Obviously, you can customize reports and so forth, but (for a) charter of accounts, (for example,) if you want 14 digits for a charter of accounts and the system says you can only have 12, it's a big job to change it to 14."

The announcement of the ASP venture between CA and C&W HKT comes just one week after Pacific Century CyberWorks Ltd. (PCCW) beat out Singapore Telecommunications Ltd. (SingTel) in a dramatic bidding war to acquire C&W HKT.

Although work on the ASP venture was already under way before the bidding war between SingTel and PCCW started, Wang said the change in ownership of C&W HKT would have no impact on the project. "We think (the acquisition of C&W HKT by PCCW) very positive," he said.

In addition to Hong Kong, CA has already announced ASP joint ventures with companies in China, Taiwan, and Korea, said Wang.

CA is in Islandia, New York, and can be reached online at http://www.cai.com.

HKT, in Hong Kong, can be reached on the Web at http://www.cwhkt.com.

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