Avanade opens Asia Pacific HQ in S'pore

Microsoft-Accenture joint venture, Avanade, took only ten months to establish an Asia Pacific headquarter in Singapore. It's future, however, will depend on how well their joint product and consulting experience can deliver on its e-business solutions.

The company previously known as Andersen Consulting gets together with Microsoft to lock horns with Sun and IBM in the IT consulting arena

SINGAPORE - While it may be a bit extreme to call it a peon of Microsoft, Avanade's future is nonetheless tied up with Microsoft's ability to deliver a platform that will satisfy the demands of a complete, end-to-end e-business solution.

No surprise there - the company was formed as a joint venture between Microsoft and Accenture (formerly known as Andersen Consulting). Microsoft delivers the enterprise solutions and Accenture, the integration expertise.

Earlier this week, at a ceremony graced by the country's Minister of State for Communications and Information Technology and Acting Minister for the Environment, Lim Swee Say, the Microsoft-centric integrator, still two months short of being a year old, launched its Asia Pacific headquarter in Singapore.

The joint venture began March last year, when Microsoft and the then Andersen Consulting decided to pump US$1 billion into a new technology services company to exclusively deploy and implement Microsoft based e-business solutions.

Andersen Consulting has since changed its name to Accenture, forfeiting the Andersen brand when it separated from Arthur Andersen, the accounting arm of the business.

The joint venture came at a time when Microsoft was seen as being unable to deliver reliable solutions at the enterprise level.

The JV was supposed to fill a void in the software giant's arsenal by providing a unit dedicated to deploying Microsoft-based solutions similar to the consulting arms of IBM and Sun Microsystems.

Nevertheless, the joint venture also raised questions about Microsoft's standing among its own channel partners and the prospect of consultants jumping ship to join the newer and faster growing company.

Now, nine months later, the new company is poised to enter aggressively into the Asia Pacific market with initial investment projected to be around 21 million in Singapore alone.

The company already has offices in four countries: Australia, Malaysia, Singapore and Hong Kong. By 2003, Avanade expects its payroll to increase to 800 employees across the region.

A deciding factor for the success of Avanade is the viability of a Microsoft based platform to deliver end-to-end e-business solutions at the enterprise level.

According to Mitch Hill, CEO of Avanade, Microsoft is well poised at the moment to deliver just such a solution.

"Microsoft is the one company that has the opportunity to singly take advantage of the layers of enterprise solutions," said Hill. "What happened this year, in 2000/2001, is that, across their platforms they got critical mass, where all the stuff actually fit together."

"All of a sudden, and at once, you can say: wow, I can do everything," Hill added.

Microsoft's Enterprise line of servers, released July last year, is slated to deliver just that, a robust, scalable, end-to-end e-business solution.

It is also supposed to be the software giant's first real contender at the enterprise level.

End-to-end solution, however, is a promise that almost every vendor makes but few seem capable of fulfilling.

For Avanade, cross platform integration and multi-platform skills remain high on the company's list of priorities.

"There isn't a customer in the world that is all Microsoft, that's why we're integrators," said Hill. "You'd need to have skills that can integrate the Microsoft platform with Unix or mainframe or Oracle platform."

Avanade remains optimistic about the prospect of implementing Microsoft-centric solutions.

Customers are still putting the new line of servers through their paces but according to Hill, the signs are promising.

"What we are seeing in the US is that many very large enterprises are putting together concrete plans for rolling out Windows 2000," noted Hill. "I tell people that we're in the swell of the wave, the wave hasn't even started yet."

Avanade has a worldwide portfolio of over 65 customers.

It has 9 customers in the region since beginning its operation here in July last year and expects the bulk of its business to come from South East Asia in the short term while North Asia holds potential for huge returns in the future.

An IDC report predicts IT spending this year to exceed US$1 trillion worldwide, with US$70 billion coming from Asia Pacific alone, excluding Japan. A sizable chunk of that spending will go toward building e-business solutions.

For now, Avanade may not have to worry too much about finding new customers - both Microsoft and Accenture have given the new start-up access to their clientele.