HP shows its strength in services

Hewlett-Packard is flexing its new-found muscle in the services business with two major technology outsourcing wins in the past week. Consumer goods companty Proctor & Gamble and phone giant Ericsson are both handing over the running of their IT infrastructures to HP.

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By  Andrew Picken Published  April 13, 2003

Hewlett-Packard is flexing its new-found muscle in the services business with two major technology outsourcing wins in the past week. Consumer goods companty Proctor & Gamble and phone giant Ericsson are both handing over the running of their IT infrastructures to HP.

The 10-year $3bn with Proctor & Gamble will see HP take over the running of its IT infrastructure, data centre operations, help desk, and network management for Proctor & Gamble’s operations across 160 countries. The deal will see HP Services take on 1,850 P&G employees from 50 countries, the two companies said.

The deal with HP was concluded after a competitive process that included other “major IT services providers” a statement said. HP rivals include IBM Global Services and EDS.

“We are excited about the opportunity to partner with one of the most innovative companies in the world,” said Filippo Passerini, global business services officer for P&G. “HP is an industry leader and will help us substantially lower costs and accelerate innovation throughout P&G. “

“Through our highly experienced services professionals, global capabilities and flexible approach to technology we will deliver P&G an extraordinary customer experience and the best return on IT,” said Ann Livermore, executive vice president, HP Services.
On the same day last week Ericsson announced it has signed a memorandum of understanding to work with HP on a similar agreement. The deal, for an undisclosed sum, is expected to be completed before the end of Q2 this year and will involve the transfer of some Ericsson personnel, the company said.

The deals have been seen by industry analysts as a vindication of last year’s merger between HP and Compaq, one of the objectives of which was to boost the company’s ability to compete on global outsourcing deal with the likes of IBM Global Services.

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