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IBM and EDS rack up multimillion-pound outsourcing deals

Nick Huber

IBM and EDS have signed outsourcing deals and contract renewals worth hundreds of millions of pounds.

Spanish Telecom provider Auna has signed a 10-year outsourcing contract with IBM valued at €400m (£281m), while EDS has extended contracts worth more than $300m (£166m) in the beverage industry.

IBM Global Services will integrate and manage Auna's IT infrastructure, including network station management, business infrastructure management, business recovery services, and the end-user support centre.

Auna will pay only for the computing resources it uses rather than pay a flat rate charge each month, under IBM’s on-demand charging model.

Meanwhile, EDS last month announced extensions to IT outsourcing contracts with consumer beverage companies, including Allied Domecq Spirits and Wine, in Europe, Latin America and the US.

In a seven-year contract renewal with Allied Domecq Spirits and Wine, EDS will provide desktop support, help desk services and infrastructure management across all of its European operations.

EDS has also announced a five-year extension to its outsourcing contract with Coca-Cola FEMSA (KOF), the number-one bottling company in Latin America.

The deals are welcome news to EDS, which last month lost its 10-year, £3bn outsourcing deal with the Inland Revenue after the government department awarded the contract to modernise tax and national insurance systems to a consortium led by Cap Gemini Ernst & Young and Fujitsu.

"The [beverage industry] contracts are good news for EDS but they pale into insignificance compared with the ones that have got away, such as the Aspire contract," said Ovum Holway analyst Georgina O’Toole. "EDS’s challenge is not to be complacent in the public sector market in the UK."

Last month, EDS was heavily criticised by MPs on the House of Commons Public Accounts Committee for problems with the introduction of tax credits.


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