AUCKLAND (03/17/2000) - The local headquarters for the new US$1 billion alliance between Microsoft Corp. and Andersen Consulting Inc. will be in Sydney, Australia.
Microsoft New Zealand general manager Geoff Lawrie says that while Microsoft will be able to draw on the capabilities generated by the pact -- which include both a joint venture called Avanade and a dedicated Microsoft enterprise platform unit inside Andersen -- direct local impact will be limited.
Microsoft and Andersen announced last week that they are to deepen an existing alliance with a plan centered around the formation of Avanade. The joint venture will focus on software applications for electronic business and the two parent companies aim to recruit 3,000 staff within two years.
Under the terms of the agreement, Microsoft will make a cash investment of $US385 million to support the formation of Avanade, as well as provide development support and other intellectual capital, while Andersen in turn will mainly contribute with training, resources, development and services staff.
"I'm not trying to undersell the Andersen thing -- it's very important and it will take us into new areas with new capabilities -- but the major focus will be high-end customers, specifically their global 300 accounts," says Lawrie.
"We've done a few things with Andersen locally, but not as much as some other partners in the marketplace, like KPMG. That's mainly because Andersen have tended to be a very high-end organization and historically our focus is in the medium part of the marketplace.
"But as we move up to be serious contenders in that part of the market it makes sense to be doing a lot more business with people like Andersen."
Lawrie agrees that Andersen will provide a useful conduit for Microsoft to develop expertise in working with enterprise vendors such as SAP and CommerceOne, "but although we're very involved in the e-commerce space, our focus is more in providing general infrastructure than getting into vertical applications. We're not looking ... to build up a vertical capability."
Lawrie also plays down the idea that a desire to reach further into the services sector has been a factor in Microsoft's move.
"I don't think the motivation is to create a services capability within Microsoft. Our motivation is probably the same as it's always been with these guys - as we start to build more sophisticated and capable platforms, we're finding that that's not enough to be successful. You need to have expertise built around to enable you to architect and build and install and support."