Friday, 29 February 2008

Who will buy the SI bit of T-Systems?

DT’s CFO Karl-Gerhard Eick said yesterday that they were “days or weeks” away from selecting a partner for the SI bit of T-Systems. Earlier this month “a person close to the negotiations told Reuters T-Systems was still in talks over the future of its systems integration unit, with three companies left in the running. The companies are US software development services provider Cognizant, India's Tata Consultancy and Canadian IT company CGI, the person said”.

In today’s Morning Briefing, George O’Connor from Panmure Gordon said “In the mix the SI division T-systems reported revenue down 6.9% to €11,987m with a loss of €323m, admittedly a 61.3% improvement on 2006. According to IDC analysts Rene Obermann’s strategy about building network centric ICT paraphrases BT’s slogan and success formula, but T-systems is not as far down that road as BT. Obermann mentioned that a partner will be announced in a few weeks.
Is Logica CEO Andy Green being radical enough – the forthcoming turnaround plan looks to making the existing bits work better – but we feel that scale to compete effectively across Europe is also a big issue. We appreciate the difficulties in restructuring a German business, but given his success at BT is there an opportunity here for Logica CEO Andy Green to pull a rabbit out of hat?"

Other rumours have linked EDS with T-Systems – which , to me, would be a much better solution to all the candidates listed above.

Read Cornelia Wels-Maug, from Ovum, take on this - T-Systems put to the acid test.

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