FLNK still has the most toys, and I'm still long, having bought in at .48 -- but here's something my broker brought to my attention tonight. Do you folks have any comment on whether this poses a threat to first-movers like FLNK?
Thursday November 18, 9:40 pm Eastern Time
FOCUS - Cable & Wireless, Compaq in Internet pact
NEW YORK, Nov 18 (Reuters) - U.K. telecommunications group Cable and Wireless Plc (quote from Yahoo! UK & Ireland: (CW.L) and computermaker Compaq Computer Corp. (NYSE:CPQ - news) on Thursday said they would join forces to create Web business links for small and medium-sized firms.
Aiming at a market that is forecast by Forrester Research to grow to $10.1 billion by 2001, the companies said they would become a ''one-shop'' e-business problem-solver by offering a complete set of computers, software, services and network links to help firms get on-line and manage Internet businesses.
They are seeking to stake a claim in the fast-emerging applications service provider (ASP) market, where businesses rent access to software via constant Internet links, reducing the need for companies to buy and manage complex computer systems in-house.
''This relationship advances each of the three key elements of our strategy: creating the NonStop eBusiness environment that enables our customers to operate 24X7, expanding our industry leading partnerships, and redefining Internet access with innovative products and services,'' recently named Compaq President and CEO Michael Capellas said in a statement.
NonStop eBusiness is Compaq's marketing phrase for its fail-safe computer systems used to run key business operations, around the clock, or ''24x7.''
Shares of Compaq posted a second day of solid gains in heavy trade on the New York Stock Exchange, ending up 1-5/8 at 25. The stock was buoyed by strong fourth-quarter results of rival Hewlett-Packard Co. (NYSE:HWP - news), which lifted U.S. computer issues generally. Cable & Wireless, which had traded lower on the London Stock Exchange, ahead of the news, recovered somewhat, ending the day down 17 pence at just below 813 pence after sinking as low as 789-1/2.
Most major communications and computer equipment makers and services providers are rushing to capture a share of this market. Sun Microsystems Inc. (NasdaqNM:SUNW - news) and Web-site management contractors like Exodus (NasdaqNM:EXDS - news) have been early movers here.
The Cable & Wireless and Compaq deal paralleled a similar tie-up between computer maker Hewlett-Packard Co. (NYSE:HWP - news) and Qwest Communications International Inc. (NasdaqNM:QWST - news), as more and more companies seek to offer an all-round solution.
The two partners called the move a key strategic step for both companies, and C&W said in a statement the two groups planned to commit a total of $500 million to the venture over the next five years.
It will initially serve customers across the United Kingdom, Europe and the United States from January 1, 2000, with further expansion planned for Asia Pacific by 2001. C&W said it would offer local connections for businesses in 84 major metropolitan markets around the globe within a year.
Under the agreement, business customers could rent a range of software and services over the Internet, using C&W as a single point of contact. Initial services to be offered will be revealed in December, with more to follow in the next three to six months, Cable & Wireless CEO Graham Wallace said.
Both firms have been refocusing to capture the convergence of telephony and computers through the Internet: Compaq in a shift from being a ''box-builder,'' and C&W has been shedding assets to recast itself as a data services group.
Compaq, the world's second-largest computer making company, has had a lackluster share performance amid tumbling computer prices and management changes. New CEO Capellas is seeking to make his imprint by embracing more efficient business methods that rely on the Internet as a delivery route for Compaq products and services.
C&W officials said they planned to invest $100 million in additional network capacity and $200 million in central datacenters and Web-management facilities. For its part, Compaq said it would contribute at least $200 million in computers, software and services over a five-year timeframe. It plans to encourage businesses to link their office workers through the low-cost Internet computer appliances it introduced last week.
''This is absolutely at the center of the strategy for Compaq, both at the network side and at the client side,'' Enrico Pesatori, a Compaq senior vice president, said in a phone interview.
Resulting revenues will be shared, although executives from both companies declined to comment on the terms, other than to say that they will be divided according to complex settlement agreements over multiple years. The pact is non-exclusive for both parties. |
