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With HP-EDS deal on tap, CSC solidifies key partnerships

John Madden

With HP-EDS deal on tap, CSC solidifies key partnerships

A few weeks after Hewlett-Packard (HP) announced its blockbuster $13.9 billion deal to acquire EDS, CSC announced expanded partnerships with three key vendors, two of which just happen to be some of EDS's strongest partners and key members of the outsourcer's touted Agility Alliance program.

Specifically, CSC in June announced:

  • an expanded relationship with Dell where the two companies will design and deploy solutions aimed at helping customers “drive excess cost and complexity” out of IT environments and “deliver more computing capacity”
  • a global alliance with Xerox to create IT and document management solutions targeted at several industries including public sector, manufacturing, healthcare, insurance and financial services
  • an initiative with EMC where the two companies will work on developing new offerings around large-scale information infrastructure and next-generation data center operations, with an emphasis on helping customers store, protect and secure their business data and information. As part of this effort, the two companies intend to work together on information infrastructure “frameworks” and collaborate on “next-generation information management solutions.”
CSC has worked with all three vendors for years in some capacity. In addition, according to press releases, Xerox and Dell are now part of CSC's recently formed Premier Partnership Program - which is probably a long overdue step in terms of CSC formalizing some of its more important partnerships.

We've given EDS high marks in past reports for the Agility Alliance as an effective program that shows EDS's ability to develop repeatable solutions jointly with alliance members; the alliance also provides an effective marketing tool for EDS as an anchor of vendor ecosystems. EDS also has been highly effective at managing the work and interaction among alliance members - which currently include Xerox, EMC, Microsoft, Oracle, SAP, Sun and Cisco. Dell was an original member of the alliance but essentially dropped out more than a year ago (when Dell was struggling with its finances, among other issues).

In announcing the HP-EDS deal, executives emphasized that the Agility Alliance will be strengthened through the acquisition, and that the program will continue to be an important EDS asset. EDS and EMC, for example, are planning to highlight their progress in collaborating on solutions this summer. But the exact future for the alliance - other than adding HP as a key partner - remains unclear (as do some other important points in how HP will leverage EDS).

With the HP-EDS deal expected to close some time this year, these CSC announcements are not exactly a total surprise. In fact, CSC's CEO Mike Laphen, in a quarterly conference call with analysts shortly after the deal was announced, indicated that some of EDS's partners had already approached the outsourcer about enhanced partnerships in the wake of HP's proposed takeover. And it certainly makes sense that Xerox - a competitor with HP on the printing and document management front - and EMC - which competes with HP in the storage hardware and software markets - might want to tighten their relationships with another global outsourcer. As for its expanded relationship with Dell, CSC is betting that the revitalized vendor - under Dell's Simplify IT campaign - will help CSC gain additional traction among data-center customers.

As HP intends to maintain EDS as a separate business unit, it could be that there will be little impact on Agility Alliance activities under HP. And in reality, partnerships where vendors jointly pursue customers in some markets or with specific solutions, and compete against each other in another segment, are more common in a consolidating industry (it should be noted that CSC counts HP as a major global partner). But CSC's announcements are a sign of how partner ecosystems are sure to shift and evolve as the HP-EDS venture becomes a done deal.




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