Consulting Firms to Promote Windows 2000 Solutions

Microsoft is putting US$385 million in cash into a joint venture with Andersen Consulting. The new Seattle-based company, Avanade, will target the world’s 2,500 largest enterprises, using Microsoft products to build e-commerce solutions to support large businesses, key industries, and application service providers. While unusual in its scope and design, the joint venture illustrates Microsoft’s increasingly tight relationships with large consulting firms. In particular, as Microsoft rolls out Windows 2000, it needs better access to the enterprises it is courting with the new operating system, and to trained consultants and integrators who can knock out solutions in Internet time.

The Role of Consultants

Large consulting firms, with their experience in large accounts, worldwide presences, and access to decision makers in major corporations, are a critical channel for Microsoft in the enterprise space. In addition to creating Avanade, Microsoft is deepening its relationship with KPMG and recently signed a major deal with European consulting powerhouse Cap Gemini. The major consulting firms typically serve a high proportion of the world’s large enterprises (Andersen says it has contracts with 85 of the world’s largest companies), and have offices on every continent and in most countries. Most have more staff than Microsoft—Andersen’s head count, at 65,000, is twice as large.