Andersen, Microsoft Ink $1B E-Business Pact

STOCKHOLM (03/13/2000) - Andersen Consulting Inc. and Microsoft Corp. today announced plans valued at US$1 billion to further deepen an existing global alliance, including the formation of a new joint venture which will deliver software applications for electronic business.

Designed with large corporate customers in mind, the plan centers around the formation of Avanade, as the new Seattle-based, jointly-owned company will be called. Avanade will mainly focus on delivering Internet-specific and other corporate software services based on Microsoft's Windows 2000 operating system.

It will within two years recruit a team of more than 3,000 staff with expertise in Microsoft's products, Microsoft and Andersen said in a statement.

Under the terms of an agreement, Microsoft will make a cash investment of $385 million to support the formation of Avanade, as well as provide development support and other intellectual capital, while Andersen Consulting in turn will mainly contribute with training, resources, development and services staff, the companies said.

Further financial details about Avanade were not available.

Andersen will also create a new internal unit dedicated to designing and building business software and services based on Microsoft's enterprise platform, according to the statement.

In addition, around 25,000 Andersen consultants will receive training on Microsoft's corporate software offerings, including Windows 2000, SQL Server, Exchange Server, Windows DNA 2000, Visual Studio-based tools and electronic commerce technologies.

Andersen and Microsoft will also launch joint programs for marketing, business development and delivery of services targeted at a broad range of corporate customers from Fortune 500 companies to new-market entrants and Internet startups, the companies said.

NOTE TO EDITORS: Steve Ballmer, Microsoft's president and CEO and Andersen Consulting Managing Partner and CEO Joe Forehand, as well as other company executives, are scheduled to hold a teleconference for media and analysts today at 9:15 a.m. PST. The call-in number within the U.S. is +1 (888) 989-6488, and for international callers the number is +1 (630) 395-0145. The passcode for both U.S. and international calls is "Microsoft."

Andersen Consulting, in Chicago, can be contacted at +1-312-693-7768, or at http://www.ac.com/. Microsoft, in Redmond, Washington, is at http://www.microsoft.com/.

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