BP’s $400m deal with HP suggests EU outsourcing thaw 

BP has signed a $400 million IT services contract with Hewlett-Packard, the latest in a brace of high profile outsourcing contracts by European companies.

Under the five-year deal, HP will manage all of BP’s data centres in America and Europe. It currently supports the oil company’s data centre facilities in UK and some other European companies.

The deal allows London-headquartered BP to standardise its data centre operations thereby reducing cost, the company said. “By establishing a standardised global operating model, BP will realise immediate cost reductions, improved consistency of service and be well positioned to utilise emerging technologies,” said BP’s CIO Dana S Deasy in a statement.

This echoes remarks by European utilities provider E.ON, which signed a $1.4 billion IT infrastructure outsourcing deal with HP last week. “E.ON demands consistent, innovative and agile IT services to operate in a competitive global industry,” said that company’s CIO at the time.

The two deals indicate that HP’s luck might be changing in the IT services market. In its most recent financial quarter, the company’s IT services division grew revenues by just 0.4% year-on-year to $9 billion.

And put next to the UK Ministry of Defence’s £800 million IT outsourcing deal with Boeing, also signed last week, this deal may suggest that the European outsourcing market – which has been stagnant for some time – may be opening up.

But just as HP’s fortunes in Europe seem to be improving, its business practices in the continent are attracting unwanted attention. Last week it emerged that an investigation into allegations that HP offered kickbacks to win contracts has been extended from Russia to include Germany, Austria, the Netherlands and some other European countries.

On a similar note, the US Securities and Exchange Commission yesterday revealed that it is investigating the departure of former HP CEO Mark Hurd. Among the allegations under investigation is the claim that Hurd gave Jodie Fisher, the former adult film star whose relationship with Hurd brought about his demise, insider information about the acquisition of IT services giant EDS before the deal took place.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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