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Compaq, FutureLink to Build Out ASP Data Centers

Seminal application service provider (ASP), FutureLink Corp. formed a partnership with Compaq Computer Corp. Thursday to expand FutureLink's data centers exclusively with Compaq server solutions.

Compaq (CPQ)) has made a $2.2 million equity investment in common shares of FutureLink with proceeds to be used for co-marketing FutureLink's hosted application solutions. The giant has also extended Futurelink a $20 million line of credit for its servers.

Through its network of data centers, FutureLink provides its ASP customers with access to complete computing solutions for a monthly subscription fee. FutureLink's service allows organizations to outsource all computing service and support, and precisely manage the total cost of technology ownership.

Compaq's high availability servers will provide FutureLink customers world-class management and performance of applications. FutureLink will initially deploy Compaq's products in its Irvine, Calif. and Calgary data centers and data centers will be operational in 2000.

"FutureLink has tapped the pent up demand for application services by offering a new and cost-effective IP option for enterprises," said Eduardo Pontoriero, vice president of Compaq's service provider business unit. "This partnership showcases Compaq's ability to move quickly, to offer the solutions and financing service providers need and to demonstrate Compaq's commitment to FutureLink's growth."

The ASP industry is a rapidly emerging segment of the computer industry which, according to Forrester Research Inc., is projected to reach $6 billion by 2001. ASPs manage and deliver application capabilities to multiple entities from data centers across a wide area network.

In October a syndicate, led by Pequot Capital Management, invested $50 million in FutureLink in exchange for newly issued shares of common stock and warrants. The funding enabled FutureLink to complete its announced acquisitions of Micro Visions of Irvine, Calif., Computer Networks, Inc. of Pleasanton, Calif. and Async Technologies, Inc. of Detroit, all leading North American Citrix resellers and systems integrators.

The company's acquisitions make it the largest provider of applications hosting platforms in the world.