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EDS lands multibillion outsourcing deal

Alstom, the French energy and transport company, is in final negotiations with Electronic Data Systems for a multibillion-dollar outsourcing deal.

EDS is to run Alstom's IT infrastructure, applications and related services in 14 countries. The contract will not include IT hardware and software embedded in Alstom's products, equipment and systems.

Alstom has an annual IT spend of €400m (£255m) and EDS is believed to be offering annual savings of €60m.

Some 1,300 Alstom employees will move to EDS under the deal, which is expected to be finalised in the first quarter of 2003.

The contract is a boost for EDS, which lost out in two major outsourcing contracts in the past month. Consumer goods manufacturer Procter & Gamble dropped a one-vendor outsourcing deal it had been pursuing with EDS in favour of a multivendor approach.

In addition, finance house JP Morgan announced it was in final negotiations with IBM for an IT outsourcing deal that could be worth $5bn.

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