The Big Six … err, the Big Four (IBM Global Services, EDS, CSC, Accenture) … raked in $15.39 billion in 2007 from single-vendor deals (> $200 million each). The other two of the Big Six, ACS and HP, failed to win even one single-vendor deal with a value of more than $200 million in 2007!
IBM Global Services and EDS were clearly ahead both in terms of the value and volume of deals that they won last year. Together they won deals worth almost four times more than CSC and Accenture combined.
IBM Global Services won 11 deals (> $200 million each), worth $7.41 billion, with its biggest wins coming from AstraZeneca ($1.4 billion). EDS, on the other hand, won eight deals with a total value of $4.97 billion, its largest deal coming from KarstadtQuelle ($1 billion).
While most of EDS’ deals were on the IT-infrastructure side, with elements of managed services, IBM’s deals were a combination of infrastructure and application development and maintenance.
CSC’s $2.01 billion was split among five deals, with an average tenure of seven and a half years. Its largest single-vendor deal was with NASA for $597 million for about 10 years to provide supercomputing support services to the NASA.
While Accenture made headlines with several deals in 2007, our analysis shows that it fared poorly in large deals (> $200 million). It signed only three deals over $200 million last year and got in $1 billion through them.
The largest of them was with Thomas Cook with a value of $400 million. This deals is the extension of their five-year old outsourcing relationship. Under the terms of the contract renewal, Accenture will provide Thomas Cook with both IT and BPO service. Accenture’s other deals were with Washington Gas Light ($350 million) and the U.S. Defense Logistics Agency ($252 million), and each was for a 10-year tenure.
And, what happened at ACS and HP? In the recent past, ACS has made headlines for two failed attempts at taking the company private and exits by its C-level executives and Board of Directors in 2007, while HP’s services division made headlines by being the company’s least contributing business unit. In fact, our research did not throw up even one IT-services deal with a value above $200 million for either company, though they were partners in a few multivendor deals.
HP and ACS were not the only losers. Several European and Indian big wig IT service providers fared poorly in terms of bagging single-vendor large deals (> $200 million) last year. Among the Europeans, BT, T-Systems and Capita were the only ones to bag large single-vendor deals, while Capgemini and Atos Origin won multivendor deals. LogicaCMG and Siemens Business Systems, however, were not to be seen in the list of big contract winners. Among the Indians, TCS and Wipro won one deal above $200 million each, though Infosys, Cognizant, HCL and Satyam did not make any large wins.
Coming back to the Big Four, what does the market share look like for them when compared to the rest? Excluding multivendor deals, the Big Four bagged deals worth $15.39 billion in 2007, while the rest (22 service providers!) combined took home $31.19 billion. In terms of the number of deals signed, the Big Four bagged 28 out of 64 single-vendor deals signed in 2007.
| The BIG SIX by value |
| Provider |
Value ($ bn) |
No. of deals |
| IBM Global Services |
7.41 |
11
|
| EDS |
4.97 |
8 |
| CSC |
2.01 |
5 |
| Accenture |
1.00 |
3 |
| ACS |
0.00 |
0 |
| HP |
0.00 |
0 |
| Parameters: 2007 IT-services deals; integrated IT and BPO deals; >$200 million; excludes multivendor deals Source: Global Services |
