A surge of major IT-services awards means that there was a strong finish to the first quarter this year for many of the big services providers. Many industry observers had predicted an end for mega deals in outsourcing with clients looking to work on smaller deals with best-of-breed suppliers. But Datamonitor tracked two deals with a value greater than $1 billion in March, and six in the first quarter compared to just four in the first quarter of 2005.
Six of the 10 largest contracts announced during March involved public-sector organizations, the largest of which was EDS’ $3 billion contract extension to its one-time problem deal with the U.S. Navy to install the world’s largest private network.
The second largest deal of the month was CSC’s strategic-services sourcing deal with the U.S. Army to provide engineering, logistics and business-operations services. The contract has a potential value of $1.5 billion.
The US Census Bureau awarded Harris Corp. a five-year, $600 million contract to develop the data-collection system for the upcoming 2010 census. Harris will lead a team of notable services and communication firms for the large project, which will support the bureau’s switch to handheld computers for its field work.
One of the most innovative deals of the month is Fujitsu Services’ $322 million project to overhaul the human-resources department supporting Northern Ireland’s civil servants. Fujitsu will work with business-process outsourcing vendor Capita Group, Oracle and accountancy firm PricewaterhouseCoopers to centralize and modernize the delivery of personnel services to 28,000 people across the Northern Ireland Civil Service (NICS) over the next 15 years.
The most surprising entry in the top ten this month is Brazilian vendor Tivit, a name largely unknown outside its domestic market. The company, which has 1,600 employees beat competition from IBM Global Services to win a $300 million IT outsourcing deal with Fidelity Processadora, a local venture, part owned by financial-services company, Fidelity National. The company has ambitions to grow its offshoring business, providing low-cost services to clients in the U.S.A. and Europe. The outsourcing markets in North America and parts of Western Europe are relatively mature, and suppliers are investing a lot of resources in pursuing opportunities in relatively untapped territories such as Latin America and the Far East. IBM Global Services has enjoyed a string of major wins in South Korea, the latest of which is a $340 million deal with financial-services firm Kyobo Life Insurance. IBM beat rival bids from four other local and international services vendors to win the deal that will see it provide IT-strategy consulting and manage the client’s servers, storage systems, network and desktop computers and operate its data and disaster-recovery centers.
| THE TEN LARGEST IT-SERVICES DEALS IN MARCH 2006 |
| Rank |
|
Customer |
|
Provider |
|
Project |
|
Region |
|
Value
($ million) |
|
Duration
(In years) |
| 1 |
|
Navy & Marine Corps |
|
EDS |
|
Infrastructure management, network management, applications management |
|
U.S.A. |
|
3,000 |
|
3 |
| 2 |
|
U.S. Army |
|
CSC |
|
Applications management, infrastructure management, maintenance/support |
|
U.S.A. |
|
1,500 |
|
10 |
| 3 |
|
Census Bureau |
|
Harris |
|
Applications development and support, applications management |
|
U.S.A. |
|
600 |
|
5 |
| 4 |
|
Kyobo Life Insurance |
|
IBM Global Services |
|
Data center outsourcing, desktop management, infrastructure management |
|
Korea |
|
340 |
|
10 |
| 5 |
|
Northern Ireland Govt. |
|
Fujitsu Services |
|
Business Process Outsourcing, human resources |
|
U.K. |
|
322 |
|
15 |
| 6 |
|
FBI |
|
Lockheed Martin |
|
Infrastructure management, maintenance/support, processing services |
|
U.S.A. |
|
305 |
|
6 |
| 7 |
|
Fidelity Processadora |
|
Tivit |
|
Infrastructure management, applications management |
|
Brazil |
|
300 |
|
12 |
| 8 |
|
Schroders |
|
CSC |
|
Desktop management, infrastructure management, maintenance/support |
|
U.K. |
|
235 |
|
7 |
| 9 |
|
MeadWestvaco |
|
ACS |
|
Applications management, helpdesk management, infrastructure management |
|
U.S.A. |
|
200 |
|
5 |
| 10 |
|
Centers for Medicare |
|
IBM Global Services |
|
Data center outsourcing, infrastructure management, processing services |
|
U.S.A. |
|
200 |
|
5 |
| |
| DATAMONITOR’S IT-SERVICES CONTRACT TRACKER LOGS EVERY PUBLICLY DISCLOSED CONSULTING, SYSTEMS INTEGRATION AND OUTSOURCING DEAL, WITH A MINIMUM VALUE OF $1 MILLION |
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