UK gas giant Centrica signs £250m cloud deal with HP

Centrica, the UK-based utility company that trades under the name British Gas, has signed a £250 million ($400 million), seven-year IT outsourcing contract with Hewlett-Packard.

Under the deal, HP will provide utility computing services to Centrica. These will not be based on HP’s recently launched ECS Compute public cloud offering, but on its previously available HP Utility Services instead, although it is "likely" to migrate to ECS Compute in future, the company says. HP will also support a hosted "private cloud" environment for Centrica.

HP said that the services will be hosted in two of its UK data centres, but also that Centrica would receive support from its delivery centres in India, Malaysia and the Philippines.

Last week, Centrica announced annual profits of £1.9 billion, more than double its 2009 figure. This profit jump came as revenues grew by just 2% to £22.4 billion.

In 2010, trade union GMB criticised what it described as the “profit-at-all-costs culture at British Gas”, and alleged that Centrica was planning to axe as many as 4,000 jobs.

Centrica vigourously denied these claims, and last week CEO Sam Laidlaw insisted that the company’s profit would be reinvested in the UK’s energy infrastructure. “The government wants energy companies to fund £200 billion of investment over the next decade to ensure secure, clean energy for the future,” he wrote for the Daily Telegraph. “We can only raise this enormous sum of money if we are profitable.”

Centrica has had mixed success with outsourcing in the past. In 2008, it sued IT services supplier Accenture for £182 million over a billing system that it says was delayed, fraught with glitches, lost the company customers and damaged the British Gas brand. That legal dispute is still ongoing.

HP’s Enterprise Services business shrank by 2% in its most recent financial quarter, but the company has recently signed a number of large outsourcing deals, many of which have been in the utilities sector. These include a $400 million contract with BP, and a $1.4 billion deal with E.ON.

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...

Related Topics