Siemens plans to market BBC software and review licensing deals after £2bn contract

Integration challenge lies ahead but commercial opportunities abound

Siemens Business Services plans to sell technology from the BBC's technology division and review IT licensing deals at the BBC following the finalisation of its £2bn IT outsourcing contract with the broadcaster earlier this month.

The 10-year deal coupled the sale of BBC Technology - a commercial subsidiary of the BBC which employs about 1,400 people - with a contract to run the BBC's IT.

In an interview with Computer Weekly last week, Siemens managing director Tom White said the company would sell software developed by BBC Technology, such as Colledia, which is used to create and distribute programmes and other media content, and also develop and market new technology.

"We are seeking to use the skill sets acquired to launch additional services for the broadcast media, for example offering standard voice [and data] communications on a common platform or through mobile communications," said White.

"What customers are looking for is to have a common IT platform [running] voice over IP so you have a common transportation layer for voice, data and media activities."

Another task for Siemens will be helping the BBC move away from tape-based methods towards making programmes digitally on desktop PCs.

Siemens will use the BBC contract as a base to offer other broadcasters consultancy and managed services and build on the current trial of a "video on demand" service. It will also invest in network technology, including fibre optics, to support the BBC's regional operations.

White said that Siemens would review the BBC's IT licences with suppliers and would consider using open source technology. "[The BBC's] purchasing power and economies of scale should ensure it is not permanently tied into one hardware supplier. And we would clearly be looking for simplification in the software landscape."

IT staff at BBC Technology will be integrated with Siemens by the end of the year. The deal originally faced opposition from broadcasting technicians' union Bectu, but strike action planned for July was called off after concerns about terms and conditions for BBC IT staff were met. Siemens has guaranteed that there would be no compulsory redundancies in the first 12 months of the contract.

Luke Crawley, supervisory official at Bectu, said the union would ballot its members to see whether they were satisfied with the agreement and whether they supported the sale of BBC Technology. He said Bectu had requested a meeting with Siemens to discuss how to move forward.

Trevor Brignall, director of business development in Capgemini's telecoms, media and entertainment practice, said, "[BBC Technology] has been fiercely independent within the BBC and it now has to be brought into a much larger organisation.

"It has to be aligned with Siemens culture but retain its independence."

Brignall said that demand for technology that digitises media content was growing and that BBC IT staff transferring to Siemens could find themselves working on cutting-edge technology for broadcasting companies that have traditionally been their rivals.

BBC IT outsourcing timetable

November 2003  BBC announces plans to sell its wholly-owned commercial subsidiary, BBC Technology, after a review identified potential annual savings of £20m to £30m.   

December 2003 The BBC calls for bidders to deliver a 10-year, £2bn IT outsourcing deal. The winner will also acquire BBC Technology. The outsourcing contract includes the provision of hardware, systems and applications, telephony and consulting.   

April 2004 The shortlist of eight bidders is revealed. It includes Computer Sciences Corporation, Fujitsu, EDS, Accenture and IBM. 

May 2004 The BBC cuts the shortlist of potential suppliers down to three: Accenture, Computer Sciences Corporation and Siemens Business Services.   

June 2004 Computer Sciences Corporation pulls out of competition for the contract. Union Bectu warns the BBC that it plans to ballot members at BBC Technology about taking industrial action over the sale.    July 2004  BBC names Siemens Business Services as the supplier for the contract.   

October 2004 BBC completes deal with Siemens Business Services.

Read more on IT outsourcing