Microsoft and Hughes Electronics have pulled out of a controversial 10-year joint venture with the world's largest university, California State.
The plan was to create a limited corporation, California Education Technology Initiative. This would go beyond a simple supply deal, since the university and its partners would work to develop products and services for profit, such as a university telephone system. The partners would help finance and supply a $300 million upgrade of IT systems across the university's 23 campuses, and expected to generate $3.8 million in revenue through services to students and joint products.
The programme came under fire from those who feared Microsoft would gain too much influence over the university's 350,000 students and lecturers. It claimed the deal did not give it exclusive supplier rights, and now says the U-turn is not connected to the controversy, but to doubts about the return on investment it would gain.
Fujitsu and GTE are still involved in the proposals but some believe they will now have to be entirely reworked.
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