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Microsoft, Andersen Form $1B Deal

March 13, 2000

REDMOND, Wash. (AP) _ Microsoft Corp. and Andersen Consulting are forming a joint venture to offer electronic commerce, Internet and other computing services to large corporations.

The venture, to be called Avanade (Av’-e-nad), will have a work force of 3,000 technical experts and be headquartered in the Seattle area. It also plans to open branch offices in San Francisco, Dallas, New York, Paris, London, Sydney, Sao Paulo and Singapore in the next 18 months

Microsoft will contribute $385 million in cash to support Avanade, as well as technical support. Andersen Consulting will provide training, resources, expertise and other services. The deal is subject to regulatory approval.

The joint venture initially will be valued at about $1 billion and may eventually become publicly traded. Andersen Consulting estimates the market for the services to be offered by Avanade could reach $15 billion in two years.

``Windows 2000 changes the landscape for enterprise computing,″ said Steve Ballmer, Microsoft president and chief executive officer. ``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.″

Mitchell C. Hill, an Andersen Consulting partner, will be Avanade’s CEO.

Andersen also will create a new internal organization to design and build business software systems based on Microsoft’s new Windows 2000 operating system and other enterprise software. About 25,000 Andersen employees will receive additional training on Microsoft software, and Microsoft product groups will work with both Andersen Consulting and Avanade to develop new products.

Andersen Consulting is an $8.3 billion global management and technology consulting company. Microsoft is the world’s biggest software company, with nearly $20 billion in sales annually.

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On the Net: Microsoft at http://www.microsoft.com

Andersen Consulting at http://www.andersenconsulting.com

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