Compaq to Enable Winstar’s ASP Services

Winstar Communications Inc. (NASDAQ: WCII), a leading broadband services company, Tuesday (Feb 13) announced details of a new strategic alliance with computer giant Compaq, through which Compaq will enable Winstar to deliver a comprehensive hosting and ASP services package.

Compaq will assist Winstar in the development of Winstar’s hosting packages that combine Compaq’s industry-leading server and storage equipment with Winstar’s broadband network connections, fully managed Web hosting services and hosted business applications from such software leaders as Microsoft, Oracle and Great Plains.

Winstar Hosting and ASP services will be made available through Winstar’s national sales organization. Winstar will also leverage Compaq’s extensive sales channels.

“Winstar’s end-to-end broadband network infrastructure and its ability to offer a broad suite of hosting solutions makes it a premier provider in the exploding marketplace for fully managed Web and application hosting services,” said Mike Heald, vice president of Compaq’s Service Provider/dotCOM Business Unit. “It is clear that Compaq’s comprehensive suite of products, services and programs for service providers, along with the strategic partnerships we are building, maximize the performance and reach of our offerings.”

As part of this relationship, Winstar will standardize on Compaq as its strategic provider for ASP and managed Web hosting server and storage equipment. The two companies will also engage in a variety of joint marketing and sales initiatives.

Winstar has chosen to standardize on Compaq as its provider of server equipment based on Microsoft’s Windows operating system. Compaq’s high-performance ProLiant servers will support the full suite of Microsoft’s .NET enterprise product line, including Windows 2000 Server, Exchange 2000 Server, SQL Server 2000, Commerce Server 2000, Windows 2000 Data Center Server and BizTalk Server.

Winstar will also standardize on Compaq’s broad line of StorageWorks storage offerings as well as Compaq Professional Services to support the ongoing expansion of Winstar’s Web hosting and ASP infrastructure. By incorporating Compaq’s innovative server and storage technology into its end-to-end broadband network infrastructure, Winstar is well equipped to maintain its leadership position within the hosted application marketplace, which Forrester Research predicts will reach $21 billion in 2002.

This agreement has been developed in connection with a previously announced $20 million Winstar equity investment by Compaq, and a $50 million equipment financing line that Compaq Financial Services has agreed to provide to Winstar, as well as an additional $50 million lease financing line for qualified Winstar customers.

“As a worldwide leader in Internet data center server equipment with extensive sales and marketing resources, Compaq is the perfect partner to support and even accelerate the rapid growth of our fully managed Web hosting and ASP services,” said Roger Pilc, senior vice president and general manager of Winstar e-Business Solutions. “Compaq will also be a key partner in helping Winstar and its customers fully benefit from exciting new opportunities in areas such as managed storage services. As a result of the many technological and sales benefits gained through this new strategic alliance, Winstar anticipates up to $100 million in new revenue for our hosting and ASP offerings over the next three years.”

Winstar is rapidly building one of the world’s most widely available, end-to-end broadband networks. Winstar makes this network important and useful to businesses by providing a comprehensive set of services that include high-speed Internet and data, Web hosting and design, phone services, Web-based applications, e-commerce, professional services and, an online business service for small and medium-sized businesses.

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