Monday, 31 March 2008

Mega contract for EDS, AT&T and T-Systems with Shell

Back in the ‘good old days’ of Holway we used to have a rule whereby the term MEGA could only be applied to contracts worth in excess of £100m pa. So I can with complete justification and without exaggeration describe both Royal Dutch Shell's $4b IT contract AND each of the $1b+ 'sub' contracts signed with EDS, AT&T and T-Systems as MEGA CONTRACTs.

Under the terms of the agreement, EDS will manage Shell’s end-user computing services including desktop, service desk, on-site services, back-up and disaster recovery, mobile information protection and managed messaging services, for 150,000 users in over 100 countries across its global operations. 1500 Shell employees will transfer to Shell. EDS will also act as operational integrator, collaborating closely with Shell’s other key IT suppliers – Microsoft, SAP, Xerox, Sun and EMC.

Bill Thomas, Exec VP of EDS EMEA, was clearly pretty chuffed about the contract when I spoke with him – as well he should be! “New” contracts of this size (rather than renewals either with the existing supplier or a changed supplier) are becoming rarer as more and more of corporate IT has already been outsourced. The contract is also truly ‘global’. There are few outsourcing suppliers who could supply its services across such a wide geography. This is therefore a big feather in EDS – and Bill’s – cap.

AT&T will provide wide and local area networks, voice services, security solutions and mobility services in a $1.6b/5 year contract. AT&T will also deliver connectivity to Shell’s 1,500 corporate and operating units. AT&T will also manage 600 separate third party contracts with 300 vendors globally. As part of the arrangement, 560 Shell networking employees will become AT&T employees.

Deutsche Telekom unit T-Systems will provide Shell with worldwide hosting and storage services in a $1b/5 year contract. T-Systems will run Shell’s data centers including three in the Netherlands, one in Malaysia and one in the U.S and will host most of Shell’s SAP applications and more than 7,400 application servers. Shell will transfer 900 employees to T-Systems.

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