Microsoft, USWeb forge alliance for managed applications

SAN FRANCISCO -- USWeb/CKS and Microsoft Corp. have formed an alliance in which the software giant will invest $90 million in the Internet services company, which in turn will build its new application hosting service on Windows 2000 and related technology.

SAN FRANCISCO -- USWeb/CKS and Microsoft Corp. have formed an alliance in which the software giant will invest $90 million in the Internet services company, which in turn will build its new application hosting service on Windows 2000 and related technology.

During a news conference here Tuesday, officials with both companies said the framework of USWeb's new iAMsystem (Internet Application Management System) would be based on Microsoft's Distributed interNet Architecture 2000.

The framework, called iFrame, combines application components, methodologies and tools for constructing and running the application services that will be sold to customers on a monthly subscription basis.

"iFrame is not a fixed endpoint in time. It's going to be something that evolves over time," said Alex Hawkinson, senior vice president of USWeb/CKS Managed Services. "It is the combination of technology components with the methodologies and tools for taking those components and extending them to build e-business solutions that match what the client actually needs."

The first iAMsystem applications - covering communications, knowledge management and e-commerce - will be available in the fourth quarter.

How the money breaks down

For its part, Microsoft agreed to invest, over the next 12 months, $67.5 million for development of iFrame-based services. Later, USWeb will pay Microsoft royalties based on those services.

"We're building this whole service around Microsoft's set of products," USWeb CEO Robert Shaw said. "We also have an agreement with Microsoft that if they don't have the product or the product doesn't scale to meet the needs of demand, we'll be free to use anything we want."

In addition to the $67.5 million, Microsoft agreed to buy $14.9 million of USWeb stock within the next five years. The remainder of the $90 million investment will go toward training and marketing.

USWeb officials brushed aside suggestions that Microsoft was paying the company to use its technology, saying the deal was an extension of USWeb's longstanding relationship with the Redmond, Wash., company. Also, Microsoft's technology had more support among ISVs then other platforms, they said.

"You have to make a choice of a platform [for hosting services]," Hawkinson said. "You can't possibly manage something that's completely chaotic."

The first Windows DNA 2000 deliverable will be Windows 2000, scheduled to ship by the end of the year.

Also as part of Windows DNA, Microsoft will roll out next year a new version of Visual Studio, Microsoft's suite of development tools; SQL Server 8.0 Host Integration Server, the next-generation Commerce Server; the AppCenter Server for managing clustered server farms; and the BizTalk XML Server.

USWeb/CKS is at www.uswebcks.com. Microsoft is at www.microsoft.com.

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