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HPE and CSC merger wins confidence of Zurich

Zurich Insurance has demonstrated confidence in CSC's merger with HPE through a contract extension

Zurich Insurance has extended its deal with CSC to the new merged entity the services company created with HPE’s services arm, known as DXC Technology.

Originally signed in 2009 with CSC, the extension with DXC Technology will last until 2022.

Under the agreement, CSC and DXC will provide services to support Zurich Insurance as focuses on digitisation. This is part of Zurich’s aim to build a datacentre infrastructure to support a digital transformation.

DXC will supply a private cloud as a managed service, along with integration services for Zurich’s use of public cloud to enable the insurer to use services from multiple cloud-based software suppliers.

“We want to offer our customers innovative, convenient products and services quickly and cost-effectively,” said Thomas Kropp, group chief IT services officer at Zurich Insurance. “Our decision to extend the contract with DXC signals our ongoing pledge to invest in the agility and modernisation of our systems for our customers.”

The contract will include support for Zurich replacing legacy IT systems with digital platforms, which will include DXC removing as much on-premise hardware as possible.

The insurer will move systems to DXC’s hyper-converged private cloud.

DXC is the result of a merger between US IT services player CSC and HP’s IT services arm in April this year.

Both companies have struggled to grow in the same way as competitors such as the Indian IT services firms, but this deal shows confidence from large corporates.

HP has struggled recently in IT services. In 2008, it paid $13.9bn for IT outsourcing pioneer EDS, but a few years later the value of this acquisition was reduced by almost $9bn. In November 2015, it split into two separate companies – the printing and devices business HP Inc and enterprise-focused organisation HPE.

CSC has also faced challenges. In May 2015, it split its business to form CSC US Public Sector and CSC Global Commercial, with the latter focusing on enterprise and non-US public sector sales. This was seen as a strategy to make the company easier to digest for any potential purchaser, or easier to manage during a merger.

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