Compaq today embarked on a $500 million agreement with Cable & Wireless to sell Internet services packages to SMEs. As revealed here earlier today, the two will roll out an application service provider (ASP) project similar to that previously announced by Hewlett Packard and Qwest. Compaq will pump $200 million into the venture, with the UK's Cable & Wireless pouring in the other $300 million to upgrade its infrastructure and data centres over the next five years. The Houston-based PC maker will supply the PCs, servers and storage hardware, with Cable & Wireless providing the services and support. The service will start on 1 January 2000 in Europe and the US, expanding to Asia Pacific during the next year, the two said today. It will incorporate Compaq's latest Web offerings, such as the iPaq Internet PC launched last week, and plans to offer a complete shrink-wrapped e-business package for SMEs. This will include supplying anything from Internet access devices to hosted business applications. Graham Wallace, Cable & Wireless CEO, said the scheme would be extended to multinationals after the first 12 months. "This move reinforces our strategy to provide business customers with Internet Protocol solutions that create real competitive advantage," said Wallace. ®