RealTime IT News

HP, DirecTV Ink Services, Tech Pact

HP got cozier with DirecTV Thursday when it announced a five-year agreement with the leading digital satellite television service provider to operate its billing system.

Financial terms of the deal, believed to be worth millions of dollars, were undisclosed. HP will deliver and maintain computing infrastructure to support the operation and performance of DIRECTV's billing system, so the satellite TV firm can focus on serving its 11 million customers.

DirecTV, a division of giant Hughes Electronics, which is in turn a subsidiary of General Motors, will employ HP's AlphaServer GS series servers running Tru64 UNIX, HP StorageWorks storage and third-party billing software by DST Innovis. HP Services will manage DirecTV's billing system from its Colorado Springs, Colo. base.

The deal comes as no surprise in the industry, as HP has hosted DirecTV's billing computing infrastructure for the about 10 years. HP installed a 114-terabyte HP StorageWorks storage area network (SAN) to support DirecTV's billing applications last year.

While the news is perhaps something for HP and DirecTV to spread holiday cheer about, the market for IT services is having a much tougher year than forecasts had pegged. To be sure, IDC said the IT industry suffered its largest decline ever in 2002, actually showing a negative growth rate of 2.3 percent.

The research firm also revised its 5-year-forecast, but is genuinely optimistic overall. It predicted that IT services spending worldwide would increase to $572 billion by 2006, a compound annual growth rate (CAGR) of 10.6 percent.

Research firm Gartner, too, said IT services, particularly outsourcing, would increase next year after one of the worst years ever. Gartner said worldwide IT services revenue is on pace to reach $556.8 billion in 2002, a 2.8 percent increase from 2001 revenue of $541.9 billion. In 2003, worldwide revenue is projected to reach $591.4 billion, up 6.2 percent from 2002.

"Outsourcing of both IT management and process management will continue to grow faster than consulting services and development and integration services," said Kathryn Hale, principal analyst for Gartner Dataquest's IT Services group. "This faster growth will result from vendors selling outsourcing services that enable buyers to both reduce their costs and improve their IT infrastructure."

In related news, HP also scored a deal with Japan's NEC in which the two will team up to provide outsourcing services for customers in China, Japan and the United States.