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NEWS
Mar 20th 2000: Australian ASP pioneer Solution 6 is to merge with Internet developer Sausage Software in an AU$3.5bn (US$2.1bn) deal, the companies announced earlier today. Solution 6 also announced a deal with Australasian telco giant Telstra to purchase Telstra's eConnect business assets, its stake in Asia-Pacific joint venture PlesTel, and rights to Telstra Financial Management Services for scrip worth AU$237m (US$145m). Telstra, which previously owned a 25 percent slice of Solution 6, is to inject a further AU$50m (US$31m) in cash, taking its stake to approximately 40 percent. It has a similar holding in Sausage. News of the 6 for 10 stock swap sent the merging companies' shares soaring on the Australian Stock Exchange (ASX) in Sydney. Solution 6 ended the day up 36 percent, while Sausage rose 28 percent. Telstra stock fell. Accountancy and legal software provider Solution 6 was the first Australian business to announce an ASP strategy in March 1999 (see related story, Aussie plan to rent SAP over Web - Apr 1st, 1999). It launched its offering, based on SAP R/3 and Lotus Notes software, last October. The deal to buy Sausage, which has also had plans for an ASP offering, is the latest in a string of acquisitions. Ted Pretty, managing director of Telstra's convergent business division, joined the Solution 6 board and has been offered the position of chairman at the new look Solution 6. Sausage CEO Wayne Bos will also join the board and has been offered the position of director. Last week, Lindsay Yelland, formerly head of Telstra Business Solutions (TBS), joined Solution 6 as COO. Yelland, who has resigned his Telstra employment and directorships, had previously been the telco's representative on the Solution 6 board. The announcement allowed Solution 6 CEO Chris Tyler to scotch a newspaper rumour published earlier in the week that he would be pushed aside by Telstra's nominee. But the further addition of Pretty, previously Yelland's boss, sent a message that Telstra aims to take a firm grip on the newly formed company. In separate news last week, Telstra became one of two Australian companies confirmed as partners in Microsoft's ASP licensing pilot program, alongside Tequinox, the ASP arm of IT services group Mincom. The telco said it will begin testing rental licensing of Office and BackOffice products later this month, and also announced a deal with Lotus to rent Quickplace, Learningspace, Sametime and Smartsuite applications. Another announcement was the unveiling of a joint venture with top-tier business consultancy PricewaterhouseCoopers. The initiative will offer enterprise applications using the ASP model to businesses throughout the Asia-Pacific region. The developments follow hard on the heels of Australia's first ASP conference, supported by internet.com and ASPnews.com, held in Sydney Mar 9th-10th. Delegates heard keynote presentations by, among others, ASPnews.com managing editor Phil Wainewright and ASP Industry Consortium president Cameron Chell, who used the occasion to announce the launch of a US$30m venture capital fund for Australian ASP start-ups by investment bank Chell.com. "We believe Australia could - and should - become the financial hub of what is going to be a multi-billion dollar Asia Pacific ASP market," Chell told the audience at the ASPCON 2000 conference. Additional reporting by InternetNews.com staff
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