American Express inks outsourcing deal with HP EDS

EDS Monday announced it had landed a five-year technology services deal to manage desktops, voice and data networks for American Express. The financial terms were undisclosed.

American Express 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. 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.

"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."

The contract involves EDS providing on-site services for about 60,000 employees worldwide and includes EDS' financial services industry knowledge, EDS 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's momentum in 2009. According to Gartner, HP-EDS won five of the largest deals in 2008 and then in April announced EDS Advanced Solutions (a subsidiary of EDS) had inked a $586 million, 12-year deal with British Columbia Ministry of Labor and Citizen's Services for hosting and data center services. EDS earlier this year inked a 10-year, $1 billion deal with Aviva, which industry watchers said was becoming less common.

"TPI continues to see overall total contract value size decrease, which is a function of shorter contract duration (under five years) and more discrete sourcing," said Mike Slavin, partner and managing director, CIO Services North America at TPI. "A significant percentage of our engagements are now below the $25 million threshold."

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