Microsoft, Corel Gear Up for ASP Battle

AUCKLAND (01/28/2000) - Software rivals Microsoft Corp. and Corel Corp. are gearing up to rent their respective Office suites to New Zealand customers via the Internet. Both companies will make announcements in the next few weeks about their plans to enter the ASP (application service provider) market.

Corel New Zealand manager, Patrina Gaskin, says the company is testing online delivery of Word Perfect Office 2000 and is in discussion with prospective host partners.

Microsoft New Zealand says it is a week away from announcing its ASP partners for renting Office 2000 and BackOffice applications. Likely candidates are Telecom New Zealand and EDS -- Microsoft's partners in Esolutions, a new e-commerce products and services alliance which will launch on Feb. 23.

Internet service provider ICONZ has also signalled that it will be renting Microsoft Office online later this year, with a pilot due to launch in the second quarter.

Novell New Zealand is also planning online delivery of its products. In the U.S., Utah-based Novell has acquired JustOn, a provider of hosted Internet file sharing and publishing services. New Zealand manager Peter Revell says this year Novell will make some significant announcements here regarding the company's entry into the ASP market.

In the U.S., both Microsoft and Corel have partnered with Calgary, Canada-based ASP FutureLink which is hosting BackOffice, Office 2000 (renamed Office Online) and Word Perfect Office 2000.

The move is significant in that it signals a shift in how software vendors license applications. Microsoft's Office Online is merely Office 2000 with a new licensing model.

The model lets ASPs license Office 2000, run it on Windows Terminal Server and sell connections to the server.

Previously, users had to provide their own copies of the application and client access licenses to an ASP before contracting for hosting.

In the U.S. Microsoft officials say fees for Office Online could range from $US50 to $500 per user per month depending on bundled services.

FutureLink charges $113 per user for platform services and will offer Office for approximately $20.

However, U.S. analysts say it could take two to five years before large enterprises with sizeable deployments of desktop productivity suites on corporate desktops start to get interested in the hosted model.

But the new model should give IT executives a peek at how they may rent software and complementary services, such as data storage and helpdesk support, in the future.

Market research company International Data Corp. predicts that the fledgling ASP market will grow to $2 billion by 2003.

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