American Express, HP EDS in five year outsourcing deal

American Express has entered a five-year technology services deal with EDS for desktop voice and data networks management.

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American Express has entered a five-year technology services deal with EDS for desktop voice and data networks management.

The global credit card provider signed the deal with EDS, an HP company, in December 2008 and reported the transaction had been completed without interruption to the company's business operations.

Further reading:

Aviva talks up mega-outsourcing deal with EDS

Why a £700m Aviva's ten-year outsourcing deal with EDS makes sense at a time when most organisations are running scared of long-term commitments.

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Under the terms of the deal, EDS is managing American Express's user desktop computing environments as well as its global voice and data networks. The financial terms were undisclosed.

"Our goal is to drive American Express' growth, innovation and customer service using secure technology that enables a more productive, efficient and collaborative workplace," said Matthew Robinson, CTO at American Express, in a statement. "Our partnership with EDS will enable us to do this while continuing to decrease operating costs."

EDS is also to deliver on-site services for about 60,000 employees based in 130 countries, and the contract includes EDS' financial services industry knowledge, executives say.

"American Express was looking for a partner to manage and transform its technology environment for better business outcomes," said Mark DeBenedictus, vice president of Financial Services at EDS, in a statement. "To do this, we're combining EDS' financial services industry knowledge with workplace and network services expertise."

This deal adds to HP EDS's momentum in 2009.

According to Gartner, HP-EDS won five of the largest deals in 2008. Earlier this year, EDS inked a 10-year, £700 million deal with insurance giant Aviva, which industry watchers said was becoming less common. Under the deal, the insurer aims to save 20 percent a year in IT costs and move to a largely pay as you go IT operation.

However, Gartner recently warned enterprises to avoid long-term outsourcing deals, and instead look at cloud computing models.

At a recent Gartner event in London, Linda Cohen, vice president and distinguished analyst, said: “Don't sign long term deals, there won't be enduring value for you or for your service provider. The days of the ten year deals are long gone.”

Siobhan Chapman contributed to this article

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