Siemens seeks partner to run data centre network

Siemens is seeking a partner to run a consolidated network of European data centres and IT networks outside Germany in a move to...

Siemens is seeking a partner to run a consolidated network of European data centres and IT networks outside Germany in a move to lower operating costs.

The German electronics and engineering giant aims to implement a strategy it has already executed in Germany and the US; namely to reduce the number of data centres and networks it operates and to take advantage of competition among IT service providers to reduce operating costs and improve business processes, said Siemens spokesman Peter Gottal.

Siemens will award the outsourcing contract early next year, but Gottal declined to provide financial details, saying only that the contract would be "in the millions, not billions."

The company spends between €3bn (£1.9bn) and €4bn (£2.6bn) a year on IT infrastructure services worldwide, according to Gottal.

The goal, Gottal said, is "to consolidate our entire IT operations across Europe and to have someone manage these operations in the most cost-efficient way."

Wholly owned IT services subsidiary, Siemens Business Services (SBS) in Munich manages the group's data centres and networks in Europe.

In Europe, SBS competes against IBM, Electronic Data Systems and T-Systems International, among others. These rivals, facing one of the sectors worst downturns, are hungrier than ever for new business.

Established in 1996, SBS began with one customer, Siemens, and one service, operating the group's data centres worldwide. Today, Siemens accounts for 27% of the IT service provider's €5.8bn sales, according to SBS spokesman Jörn Roggenbuck.

"We expect Siemens' share of our business to decrease even further," Roggenbuck said. "Although we want to keep Siemens as one of our biggest customers, we intend to broaden our customer base."

Keen to cut costs, Siemens has become increasingly willing to rely on outside companies to run its IT infrastructure. In the US, the company has awarded a telecommunications contract to AT&T.

At a recent media conference, Siemens chief executive officer Heinrich von Pierer said each member of the group, including SBS, is responsible for its own financial success. Siemens, he said, will not tolerate cross-subsidies.

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