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Telecom, GDC cut software link

Posted on: Tuesday, 20 January 2004, 06:00 CST

TELECOM and listed contractor GDC have terminated an agreement under which GDC rented out business software hosted on its own computers to Telecom customers over the Internet.

Telecom agreed in November 2002 to market GDC's iVASP software rental service to its customers.

iVASP customers paid a monthly fee for software licences and IT support, server hosting and network infrastructure provided at a central site by GDC.

The arrangement was expected to run for two years, but had a clause allowing early termination and was now effectively over, GDC chief executive Geoff Lawrie said.

GDC originally hoped the relationship with Telecom would bring in $10 million in revenues last year, but both companies said the partnership failed to meet expectations.

Telecom signed up only a handful of customers to the service, Telecom Advanced Solutions commerce services business manager Hugh McKellar said. The telco had growing faith in the potential of the rental software or application service provider market and Mr McKellar said Telecom was planning to introduce its own ASP service.

It will hold software in its own data centres and forge relationships with software suppliers, bringing tasks previously performed by GDC in-house.

Details of Telecom's ASP offering, called Officeware, will be announced within the next two months. Like iVASP, Officeware is expected to provide a full suite of business software for mid-sized firms, including desktop productivity tools.

Mr Lawrie said he did not expect the parting of the ways with Telecom to have a material effect on GDC's business.

Its iVASP rental software division generated revenues of $1.7 million from non-Telecom clients in 2002 and Mr Lawrie said direct business doubled last year.

Late last year, GDC lost a separate contract worth $40 million a year to provide field services to Telecom, sending its share price sharply lower.

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