Andersen joins Sun for online venture

Andersen Consulting has joined forces with Sun Microsystems and iPlanet to form an online procurement business.

The unnamed venture will help companies buy and sell indirect goods and services such as office supplies, computer equipment and airline tickets.

It is expected to be up and running by autumn.

The majority of the alliance will be owned by Andersen Consulting through its venture capital unit AC Ventures, but Sun will make a minority investment.

No specific financial details were disclosed, although the venture has agreed to buy up to $300m (£189m) worth of hardware and services from Sun, as well as e-commerce software from the Sun-Netscape Alliance company, iPlanet.

Joe Forehand, managing partner of the venture and chief executive of Andersen Consulting, said: "Our combined hardware, software, consulting and outsourcing services will unite leading-edge technology and procurement experts to deliver an efficient and effective business-to-business solution."

The vendors said they can help customers shave 50 per cent off their purchase costs by using e-procurement and taking advantage of the buying power of a growing user base.

They said the venture will enable companies to automate purchases, carry out contract placements using reverse auctioning tools and improve reporting using data warehousing and mining techniques.

The venture hopes to make more than $200bn worth of indirect procurement business available on its website by 2004. It has already secured commitments from customers representing $20bn in aggregated spend. Customers include companies in the financial services, automotive, telecoms, chemical and food products industries.

The move forms part of Andersen's strategy of investing $1bn in internet companies over the next five years through AC Ventures, which was set up last December.