By Ron Coates, 4 June 2003 16:59
NEWS EDS is to take over the running of Barclays' 41,700 desktops in a $350m, seven-year deal which is poised to put IBM's nose out of joint. In April this year the bank bailed out of negotiations with IBM for a £100m infrastructure outsourcing deal. At the time, it said its in-house team could do the job just as efficiently. But the announcement states EDS will have the "scope to increase this rapidly and significantly". A Barclays spokesman said: "Barclays is always looking at ways to run its operations differently. We are always looking at ways to make ourselves more efficient." Barclays is publicly committed to stripping £1bn a year off overheads in a four-year process which ends next year. Yesterday it claimed to be on course to achieve this when it announced its quarterly results. The Texas-based services giant is also to take on around 100 Barclays staff but will not take on, or buy, any assets, according to an EDS spokesman. Banking union Unify is already in negotiations about the terms of transition with Barclays and a spokesman said that the bank is "pretty good at this sort of thing".
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1. anonymous
Interesting this comes out only days after rumors that EDS were negotiating to sell either part or all of themselves to IBM.
I hope EDS have not bitten off more than they can chew, something they have done more than once; Barclays are usually fairly good at getting good deals and if IBM lost I doubt it was over anything like management or performance, rather it was over the finance with IBM walking away.
A conspiracy would have IBM planning this to add further stress to EDS, making them all the weaker at the negotiating table. Perhaps even removing the negotiating table all together.
If EDS are to survive they need to get some serious managers in. Their efforts to develop their own management solution really do not seem to have improved things. They tried to develop managers internally and then made most redundant, an admission of failure if ever there was one.
2. MIke Horton
I think Barclays will be the clear winners with this deal. Looking at the figures here I cannot see what EDS get out of it, other than a relatively short term gain, but I guess they know what they are doing. It isn't like they haven't done this before.
I don't think IBM will be too concerned, the deal cannot have been worth it to them. I don't there is much to the rumors of IBM buying out EDS, it doesn't make sense right now.