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HP Monday announced EDS had in February closed a $1 billion deal with U.K. insurer Aviva that would involve EDS transforming and maintaining two data centers over 10 years.
Aviva, the world's fifth largest insurer, contracted EDS to update and monitor two data centers in Norwich, England. The services agreement involves EDS modernizing the two data centers, but will also incorporate HP and Cisco tools, technologies and resources, according to an EDS press release. The contract also calls for EDS managing the insurance firm's mainframe, midrange and Windows servers, with about 300 Aviva employees transferring to EDS to deliver the services.
"Partnering with EDS for data center services, in our view, supports Aviva's goals to improve flexibility, increase operational efficiency and lower costs," said Igal Mayer, U.K. general insurance CEO at Aviva, in a statement.
EDS executives expect the services arrangement will help Aviva improve operations of its data centers. "The data center transformation will help Aviva increase efficiency, lower risk and reduce costs," said Bill Thomas, senior vice president for the Europe, Middle East and Africa region at EDS, an HP company.
The $1 billion-10 year deal is significant for EDS, considering many outsourcing contracts have been consistently shrinking in size, scope and duration in the past year. Global sourcing advisory firm TPI reports that megadeals, those valued at more than $1 billion, peppered the first half of 2008 but tapered off into the second half as economic conditions worsened. The number of deals worth less than $1 billion increased by 12% in that time, TPI says.
"TPI continues to see overall total contract value size decrease, which is a function of shorter contract duration (under five years) and more discrete sourcing," said Mike Slavin, partner and managing director, CIO Services North America at TPI. "A significant percentage of our engagements are now below the $25 million threshold."
This deal continues the momentum for HP-EDS. The company won five of the largest deals in 2008, Gartner says.
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Comments (4)
Great News!By Anonymous on March 2, 2009, 4:59 pmHopefully with a deal like this we wont continue to see our pay cut by 5% like it just was at HP/EDS!
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WelcomeBy Anonymous on March 3, 2009, 3:23 amWelcome Aviva employees. Just in time to have a 5% pay cut forced on you !
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AmazingBy Anonymous on March 3, 2009, 9:38 amIt is truly amazing that companies are still doing deals like this. Doesn't anybody learn?
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No impact to Aviva employeesBy Anonymous on March 10, 2009, 9:08 pmHaving worked in the UK, Aviva employees will not be subject to the 5% cut. In fact, outsourcing deals in the UK allow the transitioned employees to stay on the...
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