HP loses the moral high ground at Rolls Royce but not necessarily the business

There was an interesting contract announced today between Capgemini and Rolls Royce.
Capgemini has been awarded the job of managing Rolls Royce’s new multi-vendor sourcing strategy.

It is 12 years since Rolls Royce signed a deal with EDS, now HP, to provide all its outsourcing needs. So the deal was up for change and Rolls Royce has decided to go multi-sourced with Capgemini at the helm.

HP has lost quite a few big deals that were won by EDS since it acquired the systems integrator in August 2008 for billions of dollars.

But the Rolls Royce deal with Capgemini does not mean that HP has lost everything. It is more of a case of losing the moral high ground but not necessarily the business, says Robert Morgan, director at sourcing broker Burnt-Oak Partners.

But he says it could be the beginning of a gradual reduction in the amount of revenue HP gets from Rolls Royce. He expects perhaps a 30% reduction in HPs revenue with Rolls Royce quite quickly.

He says Capgemini will be tasked with monitoring the performance levels of the suppliers in the multi-vendor environment so HP will lose business where it does not perform.

I find this Capgemini role quite interesting and because HP was the single supplier before there are a lot of contracts that it could lose. This will be interesting to watch.

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