EDS Deal Underscores Viability of Outsourcing to Channel

If there's any doubt the outsourcing market is alive and well, it was put to rest today when Rotal Dutch Shell decided to spend $4 billion during the next five years to improve its worldwide IT and telecom support. The oil giant signed a $1 billion deal with systems integrator EDS to manage end-user computing. Other agreements went to service providers AT&T and a unit of Deutsche Telecom.

Royal Dutch executives said they sought a channel player with extensive large-scale outsourcing experience and a worldwide presence. EDS is going to manage desktops, service desk, on-site services, back-up and disaster recovery and mobile information protection recovery for more than 150,000 users in more than 100 countries. AT&T's deal also is a rich one. The service provider will manage Shell's local phone and mobile communications services around the world and gain access to AT&T's global IP network.

Look for such deals to become more common as global enterprises seek to cut costs and improve the efficiency of technology operations. Another driver is the need is to update corporate networks and move toward IP, a task global companies seem more willing to entrust to experienced channel partners than undertake themselves. That's an indication the technology prowess of the channel is going to be rewarded in a big way.

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