Nov 18th 1999: Cable & Wireless and Compaq today announced the first mass-market global ASP for small and medium-size enterprises (SMEs).

Due to begin offering services in the USA, UK and continental Europe from 1st January 2000, the Cable & Wireless venture will be supported by a $200m commitment from Compaq. The world number two computer company will supply applications, services and other resources, including client-side equipment such as its new iPaq $499 Internet access device, Aero handhelds and notebook PCs.

The London UK-based telecoms provider, which had revenues of around £8bn ($13bn) for the year ended March 1999, will deliver applications from a global network of data centres connected to its Internet backbone. It announced today a $300m investment in existing and new data centres, and is currently in the process of a £2bn ($3.3bn) upgrade to its network infrastructure, including a complete overhaul of the US Internet backbone that it bought from MCI last year. As well as upgrading to OC48 and ultimately OC192 capacity, it is extending the network internationally, with nodes already in London, Jamaica and Munich and others planned for Tokyo, Sydney and Hong Kong by the spring. By 2001, there will be 84 nodes worldwide.

"This will enable us to offer to small businesses around the world a complete end-to-end solution with a single point of contact," Cable & Wireless group chief executive Graham Wallace told press and analysts.

The C&W; service will offer a range of applications including e-procurement, e-marketplace trading, unified messaging, salesforce automation, office productivity, and a range of added-value IP services such as virtual private networking and media streaming. "Initially we'll be targetting small to medium size businesses, and multinationals after twelve months," said Wallace.

Customers will pay on a monthly, per-seat basis for the bundled applications and services. Pricing and bundles are still being defined, and specific product announcements will follow over the next three to six months, Wallace said. The two companies declined to name any of the software vendors whose applications they expect to offer.

C&W; will also provide hosting services to ISVs, ASPs, dot-com companies and others who wish to market their own online solutions.

Despite its close involvement in the C&W; venture - which was initiated when the two CEOs first met in the summer - Compaq expects to continue to work with other service providers, said president and CEO Michael Capellas. "We will continue to be an infrastructure provider to the ASP space across the entire industry," he said.

"Applications, bundled as a utility and bought as a utility - this is where IT is heading," he added.