Telstra today announced that it had pared down the number of its major outsourcers to three, granting EDS, Infosys and IBM around $1.2 billion worth of new contracts.
The five-year contracts came out of the company's IT transformation plans to modernise its ageing legacy systems. According to the company, the transformation program had allowed it to review its IT contracts and systems, consolidating work carried out in application development and maintenance and infrastructure build management and support.
EDS and Infosys received the go ahead to work on application development and maintenance worth $450 million combined, although IBM will remain a strategic partner. EDS' portion will net it $190 million but has additional discretionary components, which could raise the bar to $334 million.
IBM meanwhile has nabbed itself a new contract to manage Telstra's infrastructure, worth $745 million over five years. The agreement covers datacentre mainframe operations, a proportion of mid-range operations and maintenance. Telstra hoped to increase the remote management capability of its systems and to reduce infrastructure build time.
"This is an important milestone for Telstra IT. One of the key outcomes of our IT transformation is the delivery of operational excellence," Telstra CIO John McInerney said in a statement.
All three of the vendors had already been working for the company, but survived a contractor cull that the telco had flagged last year. IT said that it intended to lower the number of its contractors to two from the original count of four: EDS, IBM Global Services, Infosys and Satyam.
The final number, three, has lead to only Satyam being kicked out of the telco's deals, as was reported last year.
Satyam has been having trouble since a scandal earlier this year where it was revealed that the company's former chairman Ramalinga Raju had been doctoring the company's books.
I wonder if this means more job cuts for HP/EDS?Seems everytime either brand wins a contact for $1mill plus the other pushes for job cuts due to economic etc etc...