HP and BT sign $1.5bn services mega-deal

5 May 2004 Hewlett-Packard (HP), the world’s second largest computer maker, and telecoms giant BT are to develop a strategic partnership and outsourcing deal worth $1.5 billion over the next seven years.


The agreement, announced in New York by HP CEO Carly Fiorina, is intended to help the two companies compete for services contracts in the rapidly converging IT and communications markets. It will also help HP to better compete against rivals such as IBM.

The deal will split revenues almost evenly between the two companies. Under the terms of the deal, HP will manage BT’s midrange and desktop infrastructure in the UK, while BT will manage HP’s voice and data network and production support call centres within the Europe, Middle East and Africa (EMEA) region.

“Connections matter more than ever today,” said HP’s Fiorina, “and in a world where business and technology are inextricably linked, bringing together IT and communications into one seamless environment creates a solid foundation for growth”.

At HP’s annual conference for EMEA in Munich, BT’s CEO of global services Andy Green added: “This is a really exciting opportunity and a big step forward for both our companies towards a world that is mobile, digital and virtual. The partnership is just right for the moment and will lead to huge customer benefits.”

The agreement will involve the transferal of 330 staff from both companies, he said. It emerged after the conference that around 290 BT employees will move to HP, and around 40 HP staff will move to BT.

The transition is expected to be completed within the next few months.

Despite this, Nora Denzel, HP’s senior vice president of adaptive enterprise and software told Infoconomy that she expected the move to have no adverse impact on staff. “We look after the individual needs of all our employees,” she said.

Initially, the companies plan to address targeted European enterprises, as well as the UK mid-market, consumer and small- and medium-sized business (SMB) markets through a combination of service offerings. The UK’s National Health Service, one of BT’s biggest clients, will be one of the first organizations to be serviced by the alliance.

Ultimately, however, the companies hope “opportunities will develop” for the alliance to provide global services.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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