After months of speculation, oil giant Royal Dutch Shell officially announced the plans to outsource a large part of its IT and communications infrastructure to three providers: AT&T, T-Systems and EDS.
Details of the major multisourcing deal had first leaked out in Jan. ’08, when an e-mail from a top IT executive at Shell specifying the names of the three chosen providers was obtained by a Website that criticized Shell’s moves. The contracts were finally signed in Mar. ’08, and it was announced that, as part of the project, approximately 3,000 Shell employees will be transferred to the outsourcing providers, with 1,500 joining EDS, 900 transferred to T-Systems and 560 moving to AT&T.
The full value of the project is $4.2 billion, with AT&T and T-Systems scooping deals worth $1.6 billion each and the remaining $1 billion contract going to EDS. AT&T will manage and maintain a global communications infrastructure for Shell, while T-Systems will provide global hosting and data-center outsourcing services, and EDS will deliver desktop-support and business-continuity services for 150,000 users in over 100 countries.
Apart from the Shell deal, public-sector outsourcing deals dominated contract activity this month, just as they had done during the last month. Five of the 10 biggest deals tracked by Datamonitor involved government agencies, including the U.S. Department of State and Defense and the U.S. Marine Corps.
| The Ten Largest IT Services Deals in Mar. 2008 |
| Customer |
Provider |
Engagement(s) |
Value
($ mn) |
Duration
(in yrs)
|
| Royal Dutch Shell |
AT&T |
Network mgmt. |
1,600 |
5 |
| Royal Dutch Shell |
T-Systems |
Data-center outsourcing |
1,600 |
5 |
| Royal Dutch Shell |
EDS |
Desktop mgmt., business continuity |
1,000 |
5 |
| Department of Defense |
Lockheed Martin |
Application design, testing services |
766 |
— |
| Department of State |
Stanley |
Maintenance, training |
570 |
5 |
| U.S. Marine Corps. |
General Dynamics |
Network mgmt. |
375 |
5 |
| Avon and Somerset Police Authority |
IBM |
Business process outsourcing |
370 |
10 |
| BT Group |
Tech Mahindra |
Maintenance |
350 |
5 |
| Department of Defense |
Lockheed Martin |
Maintenance |
344 |
5 |
| Zain Group |
Motorola |
Network mgmt. |
335 |
— |
