HP Wins AOL Support Bid

HP extended its support contract with AOL for another three years, the companies said today.

The agreement is an expansion of AOL’s existing one-year services contract with HP but does not include any outsourcing support.

The two companies have been partners for 10 years, but the new deal covers AOL’s U.S. data hubs in Northern Virginia, Ohio and California. AOL said it was looking for only one company to run the support services of the majority of its servers in its multi-vendor environment, and HP offered a flexible pricing plan.

“HP’s approach will positively impact not just our infrastructure, but the speed with which we can respond to the needs of America Online’s customers,” David Cole, senior vice president at AOL, said in statement.

Terms of the deal were not disclosed, but HP senior vice president Mike Rigodanzo told internetnews.com the final number is in the tens of millions of dollars.

“We won this contract in a competitive bid situation against one of our competitors, but AOL is not disclosing whom that is,” Rigodanzo said. “They were looking to primarily reduce their overall support costs.”

Rigodanzo also added that HP’s support of AOL’s multi-vendor environment could help the service provider follow through with its promise of an AOL-branded Voice over IP service next month, but Jeff Tyeryar, director of technology business development at AOL, said there was no connection between the two.

AOL CEO Jonathan Miller named Level 3 and Sonus Networks back-end support partners Tuesday.

Industry wide, Rigodanzo said HP estimates typical overall maintenance and applications support costs can reach 70 percent to 75 percent of a company’s total budget, which leaves very little for development and deployment. HP tries to bring support costs down to 40 percent to 60 percent total spend depending on the environment.

Rigodanzo said the three-year extension is the first time that AOL has bought into HP’s Integrated Support Services (ISS) package, which is a part of HP’s Adaptive Enterprise strategy. The ISS contract lets AOL keep stewardship over its own assets.

HP will be responsible for supporting more than 15,000 servers from multiple vendors, including systems by IBM and Sun Microsystems.

HP’s inventory at AOL includes 9,000 HP servers — including HP Integrity, HP 9000, HP ProLiant and HP NonStop servers, as well as HP workstations.

The computer and printer maker will also provide 24-hour call management services, support tool software, a dedicated onsite support team and dedicated onsite HP parts inventory.

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