CAIS Internet Inc. and Microsoft Corp. Wednesday inked a
three-tiered alliance to advance broadband access and content services for
travellers nationwide.
CAIS (CAIS)
and Microsoft (MSFT)
are to develop a co-branded portal designed to distribute Web content
through CAIS’s broadband networks in the hospitality industry. Microsoft
also has an option to participate with CAIS in multifamily dwelling unit
operations.
As a part of the deal CAIS will put Microsoft’s BackOffice operating
platform to task on its network. Additionally, Microsoft has also agreed to
make a $40 million equity investment in CAIS Internet in convertible
preferred stock at a conversion price of $24 per share.
The investment aspect of the transaction, which is subject to certain
regulatory approvals, is expected to close in the next six weeks.
Details of the alliance require that Microsoft will provide CAIS with a
co-branded version of the MSN portal.
CAIS will also tap into use of Microsoft’s Hotmail Web-based e-mail service, as
well as MSN’s shopping, news, travel and finance services.
Yusuf Mehdi, Microsoft consumer group vice president, said the CAIS deal is
a tremendous benefit for its international travelers who want an easy way
to stay connected when travelling.
“Today’s announcement is yet another solid step in delivering the Everyday
Web to consumers,” Mehdi said. “Now consumers can access MSN from their
desk via their PC, stay connected while traveling via MSN Mobile, and
reconnect once they reach their destination through CAIS Internet services
and the co-branded MSN portal.”
CAIS Internet will work with Microsoft to accelerate adoption of key
Microsoft technologies and software that support CAIS’s broadband services.
CAIS Internet has signed agreements with top-notch hotel chains,
collectively representing over 9,800 properties and 1.3 million hotel
rooms. CAIS provides specialized Internet content and broadband Internet
access to business and recreational travelers.
Ulysses G. Auger II, CAIS chief executive officer, said the Microsoft
alliance leverages its grip on a major piece of the hospitality industry’s
market.
“This relationship takes advantage of our broad customer base and market
position, and combines it with Microsoft’s strong platforms and clear
leadership in the Internet media business,” Auger said. “We believe that
this agreement will complete the CAIS broadband access customer’s
experience to provide the most convenient, high-speed and maximum utility
of going online with CAIS Internet.”
Charles Stevens, Microsoft enterprise and partner group vice president,
said business travelers would enjoy faster dial-up connections when working
from hotels nationwide as a result of the deal.
“By combining our technology strengths with CAIS Internet’s broadband
technology and industry expertise, we can ensure that the hospitality
industry and businesses travelers receive all the benefits possible from
Windows 2000, Microsoft’s entire enterprise platform and MSN services,”
Stevens said.
Hotels that subscribe to the CAIS Internet service receive flat-rate
Internet connectivity up to 50 times faster than dial-up modems. CAIS
offers the hospitality industry the ability to install an unobtrusive
broadband Internet solution to turn existing in-building wiring into voice
and data path without an end-user modem.
