Telecom Italia has hired Hewlett-Packard to handle its entire desktop computing environment, which is used by about 90,000 employees.
The five-year outsourcing contract is worth €225m (£153m) and HP's largest so far, said Juergen Rottler, HP's vice president of marketing and strategy alliances.
"It always depends on how you look at a deal over the course of its life, but I think starting out as an initial announcement, this is the largest deal in desktop outsourcing we have closed to date. That's not to mean that maybe prior deals haven't grown bigger than this one by now, but as an initial deal this is the biggest ever."
The services HP will provide span the entire scope of the European telecommunications giant's desktop computing, including asset management, help desk, maintenance and management services.
"We're providing a complete lifecycle outsourcing service for their desktop computing environment," said Rottler.
About 600 Telecom Italia IT telecom specialists will move over to HP, where they will staff a new HP division devoted to providing desktop services, initially just to Telecom Italia and possibly to other clients in the future.
Telecom Italia decided to outsource these desktop functions in order to save money, focus on its telecommunications operations and have more flexibility in adapting its desktop infrastructure as its needs change, Rottler said. He declined to say how much Telecom Italia expected to save, other than that it would be "a double-digit percentage savings" over the current cost.
The agreement also calls for HP to buy from Telecom Italia the desktop infrastructure it will manage and lease it back to Telecom Italia, a transaction that is factored into the value of the contract.
"As part of the overall deal we also agreed to be using some of Telecom Italia's SAP hosting capabilities in our delivery of SAP [outsourcing] engagements," Rottler said.
The contract will become operational once worker unions and regulatory authorities sign off on it, Rottler said. It is possible that the scope of the engagement could be expanded beyond the desktop environment in the future.
The companies also announced that HP will use Telecom Italia facilities to host SAP applications from HP customers in Italy. Telecom Italia will bill HP for these services separately from the outsourcing contract as these hosting deals are struck, he said.