Andersen, Sun, iPlanet Setting Up E-Procurement

FRAMINGHAM (04/25/2000) - Chicago-based Andersen Consulting Inc. today announced that it's teaming up with Sun Microsystems Inc. and iPlanet E-Commerce Solutions to form an Internet-based procurement venture.

The new company, which hasn't yet been named, will seek to provide corporate users with electronic purchasing services. It's due to be fully operational in the fall.

It already has committed to purchase $300 million worth of hardware and services from Sun as well as e-commerce applications and infrastructure technology developed by Mountain View, California-based iPlanet, a joint venture between Sun and Netscape Communications Corp.

The announcement by Andersen, Sun and iPlanet comes two months after The Chase Manhattan Bank and Deloitte Consulting, both based in New York, said they planned to launch a similar procurement services company this spring.

Andersen's AC Venture unit has made a majority equity investment in the new e-procurement firm, while Sun has bought a minority ownership stake, the companies said in a statement. They didn't release any financial details regarding the investments.

The new venture will serve such industries as the automotive, financial services, telecommunications, chemicals and food services businesses and will allow companies that sign up to purchase indirect goods and services, such as office supplies.

It hopes to attract more than $200 billion worth of indirect procurement by 2004. Andersen and Sun said companies worldwide have already agreed to spend $20 billion through the online marketplace that they're setting up.

Erica Rugullies, an analyst at Giga Information Group Inc. in Cambridge, Massachusetts, said Andersen is trying to establish itself in the burgeoning e-procurement services market and at the same time get an equity stake in a new dot-com business.

For Sun and iPlanet, Rugullies said, the online procurement company will provide a broader sales channel for their products. And, like Andersen, Sun will also get some coveted dot-com equity, she said.

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