HP Strengthens Euro Ties in IT Deals

Hewlett-Packard has snagged two computer services contracts in European markets that together account for over $1.3 billion worth of business to the tech vendor.

The Palo Alto, Calif.-based tech giant has won a contract to provide computer services to the Swedish Agency for Public Management in a contract valued at about $709 million (650 million euros), which runs until Jan. 31, 2005.

Also this week, longtime client Bank of Ireland named HP Services as its preferred supplier of information technology infrastructure and said it plans to award HP a seven-year IT outsourcing contract worth about $600 million. The pact marks the largest IT services contract in Ireland to date, HP said.

Under the Swedish contract, HP is expected to work with eight other technology suppliers to provide Swedish public authorities with desktops, portable PCs and accessories. It also gets to supply about $284 million worth of its own hardware products.

The Swedish Agency for Public Management is the agency that coordinates information and communication technology purchases for the public administration in that country. It works to simplify IT purchases for public authorities, municipalities and county councils by signing framework agreements with suppliers, with a goal of deploying a common and secure electronic infrastructure. The contract with HP builds on a prior $181 million pact with the Swedish Agency for Public Management, which covered all federal procurement of servers and storage.

HP and The Bank of Ireland are currently finalizing the details of the seven-year outsourcing contract. It calls for HP to manage the bank’s desktop environment, midrange servers, mainframes, networks, output and printing, and facilities.

HP Services also plans to provide some customer support and consulting and integration services as part of the contract. Like many global financial institutions that have signed outsourcing pacts in the past few months, The Bank of Ireland said it is looking to minimize operating costs and reduce volume consumption. In essence, it will end up shifting some of its internal IT costs to HP; about 500 bank employees are to be transferred to HP as part of the agreement.

HP said it has been a supplier of IT products and services to the Bank of Ireland since 1974. It currently provides the bank’s NonStop platform, high-end Alpha systems, storage subsystems and ProLiant servers as well as desktop PCs to many of the bank’s units.

The latest contracts follow two big client wins for HP, which beat out its IT services rivals to win a major outsourcing contract with consumer goods maker Procter & Gamble worth $3 billion over the life of the 10-year managed services pact.

It also won an IT services contract with Swedish mobile device maker Ericsson . Although the financial terms with Ericsson were not released, analysts have reportedly noted that the pact’s value is substantial.

HP has been competing more aggressively for outsourcing projects alongside top IT services vendors such as IBM , CSC and EDS .

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