Here's what the Dow Jones Newswire ran on the CPQ/CW story..
Regards,
John
Dow Jones Newswires
Compaq To Invest $200M, C&W $300M In
Cos' ASP Venture
By MARCELO PRINCE
NEW YORK -- Compaq Computer Corp. (CPQ) will contribute $200
million while Cable & Wireless PLC (U.CW) will invest $300 million
on their five-year initiative to sell hosted software and Internet
services, executives said.
Early Thursday, the two firms announced an agreement to create a
global application service provider, or ASP, targeting small and
midsize businesses starting Jan. 1. The ASP will be a unit owned
entirely by Cable & Wireless, but the two firms will share any
revenue it generates.
David Sexton, chief executive of Cable & Wireless Global Markets,
said the British firm will invest $100 million initially on base
infrastructure and an additional $200 million over the course of the
agreement to build out its data centers.
Compaq, meanwhile, will contribute about $200 million in server
applications, storage and services over the course of the deal, said
Enrico Pesatori, senior vice president and general manager of the
computer maker's enterprise solutions and services group.
The executives declined to comment on how much revenue they
expected the initiative would generate, noting only that Forrester
Research forecasts the ASP market will reach $10.1 billion by 2001.
"The ASP market is exploding today," Pesatori said, and although
Compaq isn't interested in becoming an ASP, it is working to
ensure its hardware is chosen by such firms.
Sexton said the ASP initiative brings added capabilities to its global
IP network, the backbone of which it acquired from MCI Worldcom
last year.
The new unit will eventually have a total staff of about 1,000, with
about 10% coming from Compaq, the executives said.
- Marcelo Prince, Dow Jones Newswires; 201-938-5244
Briefing Book for: CPQ | CWP | U.CW
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