Sunday, 14 December 2008

Distressed Consolidation

(By Richard Holway) On 5th Dec 08 I wrote about the The spectre of bankruptcy hanging over GM and the effect that this might have on its main IT providers – HP and EDS. As I write, the situation is unresolved and bankruptcy is still a real possibility.

Of course, the main failures so far have been the banks and IT plays an integral part in their operations. Today Santander announced 1,900 job losses in the UK and quoted that most of the job losses would fall in IT as Santander moved Alliance & Leicester and Bradford & Bingley’s IT operations onto the Santander Partenon platform. You might remember that Santander did the same when they bought Abbey last year. Santander is a serial case of reverse outsourcing – ie bringing the IT of acquired businesses back in house.

This Distressed Consolidation is, in my view, going to play a significant part in a depressing outlook for IT in the next few years. You may remember I introduced the term Cold Tech some years ago to describe 'More for Less' trends that actually reduce the total size of the IT pot. Distressed Consolidation is one such - and I’m afraid to say that I think its effects have only just started.
I must look up who are the main suppliers of IT at Woolworths.

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