HP chalks up big outsourcing win

21 February 2003 Systems giant Hewlett-Packard has won its third big, multi-year outsourcing contract in the space of less than three months.

Its latest deal is a $243.5 million, five-year contract to manage desktop computers for Telecom Italia. That follows the announcement in December of a deal worth “hundreds of millions” of dollars to manage the technology behind US media company DirecTV’s billing operations, and a deal in January to run automotive supplier Delphi’s SAP business applications software in North America and Singapore.

However, the value of such deals can often be hard to quantify as they frequently involve the rolling up of existing business into the new contract.

Although still dwarfed by the leading outsourcing vendors, IBM and Electronic Data Systems, HP is becoming an increasingly serious force in outsourcing. The company also recently beat both IBM and EDS in a business outsourcing customer satisfaction survey carried out by US magazine InfoWorld.

As part of the Telecom Italia deal, HP will provide 90,000 users with help desk support and maintenance. HP and Telecom Italia have also agreed to join forces to host SAP business software systems for other companies in the future.

HP’s managed services unit, which includes outsourcing, grew 14% year-on-year in the company’s latest quarter to the end of October 2002. However, for the full year to the end of October, HP’s overall services division, which includes support and consulting, posted revenues of $9.1 billion, up from $6.12 billion posted in fiscal 2001.

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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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