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Andersen, Microsoft in pact
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March 13, 2000: 3:21 p.m. ET
Consulting firm and software maker in $1B technology services joint venture
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NEW YORK (CNNfn) - Andersen Consulting and Microsoft Corp. agreed Monday to launch a $1 billion joint venture that will focus on providing technology services using the software maker's new Window 2000 operating system.
Under the deal, which expands an earlier agreement between the two companies, Andersen and Microsoft will create a new company called Avanade, which will focus on providing services and consulting for electronic commerce and other technology systems using Microsoft's Window 2000.
 "We're extremely excited about the opportunities with this alliance," Andersen chief executive Joe Forehand told CNNfn. "We're at an age right now as we move to the new economy where we really are seeing the intersection of the Internet with robust enterprise solutions that will be driven from the Windows 2000 platform."
Redmond, Wash.-based Microsoft will contribute $385 million in cash to support Avanade, which will be based in the Seattle area. Other financial details were not disclosed.
Andersen, a leading advisor on e-business, estimates that services offered by the joint venture could reach $15 billion by 2002.
"By combining our technology strengths with Andersen Consulting's recognized business and industry expertise, we can ensure that the most demanding enterprise customers receive all the benefits possible from Windows 2000 and Microsoft's entire enterprise platform," Microsoft CEO Steve Ballmer said in a statement announcing the deal. (275K WAV or 275K AIFF)
 Ballmer told CNNfn that there are plans to take Avanade public at some point in the future, which should attract many candidates for the 3,000 technologist jobs Avenade must fill. (354K WAV or 354K AIFF)
Privately held Andersen is owned by the partnership Andersen Worldwide, which also owns the accounting firm Arthur Andersen. Partner Mitchell C. Hill will head the joint venture.
The joint venture is subject to regulatory approval. Microsoft is in settlement talks with the Justice Department in an effort to end the government's antitrust suit against the software maker.
Microsoft (MSFT: Research, Estimates) shares closed up 1 at 101 Friday. 
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