Andersen Consulting and Microsoft Form New Company

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The computer giant, Microsoft, and Andersen Consulting have teamed to form a new company called Avanade. The new company will focus on providing Internet services that utilize Microsoft's Windows 2000 operating system.

This new venture is a big move for Microsoft. The company is throwing $1 billion in the kitty to push its way into the e-commerce services sector. Andersen is bellying up to the table with other resources such as training, services and intellectual property. Initially, Andersen will own 51 percent of the new company while Microsoft owns the rest.

Over the next three years, Avanade hopes to stake out $1 billion of the $20 billion available for services of this type in the market. The first line of attack will focus on Andersen's core clients, which are mostly Fortune 500 companies.

Microsoft has never really cashed in on the services arm of Internet offerings while other companies such as IBM and Sun Microsystems have developed a strong niche for these services. Andersen Consulting offers exactly what Microsoft needs to excel in this new arena. The only other company that even comes close to the talent Andersen provides is IBM.

The company's official launch will be in a couple of weeks. But first, the company has some serious recruiting to do. It will take an army of 5,000 consultants to power Avanade and bring these new services to companies.


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