Compaq, Cable & Wireless pair to pitch ASP wares

Fueling the partnership trend in the growing application service provider market, Cable & Wireless and Compaq have announced plans to create a global ASP business.

The companies intend to roll out application-hosting services by January to small and midsize organizations.

Cable & Wireless and Compaq did not provide many service details, but company executives did say customers can expect enterprise resource planning (ERP), customer relationship management (CRM), unified messaging, sales force automation and office productivity application-hosting services.

Some of Cable & Wireless' initial application-hosting services will be based on existing relationships that Compaq has with companies such as Microsoft and Oracle. The application-hosting services will include hardware, software, management and implementation for a monthly fee that's based on the number of users accessing the applications.

Cable & Wireless will be deploying Compaq servers within its data centers to support its application-hosting services and will offer customers Compaq client access devices ranging from standard PCs to wireless hand-held devices. Compaq NonStop eBusiness consulting and professional services will also be bundled with the ASP offerings.

The two companies will be investing more than $500 million over the next five years in the new ASP business. Cable & Wireless and Compaq will be sharing revenue stemming for this business.

All vendors involved need partnerships to be successful in the ASP market, says Meredith Whalen, an analyst at International Data Corp., in Framingham, Mass. Solid ASP services come with application network and systems experts, and most companies don't have all the components, she says.

Cable & Wireless' partnership with Compaq follows on the heels of Sprint's recently announced deal with Deloitte Consulting and Qwest's partnership with KPMG and Hewlett-Packard.

Qwest and KPMG have developed a joint venture called Qwest.Cyber-Solutions. The ASP hosts all its application servers in Qwest data centers and relies on KPMG's software implementation and management expertise. Sprint's deal with Deloitte is similar, but the two companies are not setting up a specific joint venture to address the market. Instead, Sprint is providing its data centers and Deloitte its software expertise.

Cable & Wireless' deal with Compaq is similar, but Compaq's NonStop eBusiness consulting and professional services business is probably not as well-known among enterprise business users as KPMG and Deloitte. But that may not matter because Cable & Wireless isn't going after the Fortune 1000 with its ASP services.

"These partnerships are only the beginning," Whalen says. Most vendors are struggling to figure out if it would make more sense to sell their software to the ASPs, such as PeopleSoft has done, or to actually become an ASP in the manner of an Oracle. i