Regus, the serviced office space provider, is to outsource its
entire IT infrastructure and support in a bid to reduce its core
costs by 40%.
The company, which has operations in 50 countries, has signed a
£25m deal with Compaq, Colt Telecom and software manufacturer Cedar
Group.
"This outsourcing deal means that we double our service levels
while reducing costs by almost 40%," said Mark Dixon, Regus chief
executive officer.
Charles Homs, a senior analyst with Forrester Research, told
CW360.com: "It sounds reasonable that Regus should stick to its
core competency, which is delivering serviced office space.
Outsourcing its tenants' IT makes sense because IT suppliers can do
a better job than it could."
The move could signal the company's desire to offer tenants a more
comprehensive serviced office solution. "For example, start-ups and
smaller companies could think about outsourcing their HR or their
CRM to Regus," said Homs.
But Steve Barrie, a chief analyst with IT information group Bloor
Research, was sceptical that Regus would be able to reduce its
costs by almost half without its service being affected. "It is
almost unheard of for an outsourcing deal to produce that kind of
benefit unless you were doing something horribly wrong in the first
place," he said.
A spokesman for Regus denied that the company had been delivering
an inferior service to its tenants, and said that the outsourcing
was driven by growth. "During the last 12 years, we have been
growing at 9% compound a year," he said. "Our rapid growth has
meant that our IT systems globally would benefit from synergies,
rationalisation and consolidation.
"We believe that working with this arrangement, with Compaq in the
lead, will allow us to rationalise and consolidate on a global
basis while cutting costs. We can provide a better quality service
to our clients, managed by one supplier."