Feeds

EDS seals $4.5bn gig with Bank of America

Some good news at last

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

ComputerWire: IT Industry Intelligence

Electronic Data Systems Corp made a major stride in its effort to restore its battered reputation yesterday by announcing a ten-year $4.5bn outsourcing deal with US financial giant Bank of America,

writes Joe Fay

.

EDS believes the contract ranks amongst the top ten services transactions ever, and is the biggest deal to date in the financial services industry. The deal covers the Charlotte, North Carolina-based bank's voice and data network infrastructure, and will see 1,000 Bank of America workers moving across to EDS.

The deal was finally signed yesterday, a day after market speculation that Plano, Texas-based EDS was about to clinch the contract helped push up its share price.

EDS has endured a tough few months. It was forced to lower its third quarter and fourth quarter forecasts, partly because of the financial difficulties of key customers. EDS's penchant for mega deals has also become a liability in the eyes of some, because of the high start-up costs they often incur. It issued a further profit warning earlier this week, because of investments associated with leveraged aircraft leases with United Airlines, which is in Chapter 11 bankruptcy protection.

However, EDS said yesterday that it would not be exposed to large start-up costs with the Bank of America deal. Larry Ivins, enterprise client executive at EDS, said that the bank had grown by acquisition, resulting in a complex network. EDS expected it could reduce the network elements by 30% he said. He said the strategy in the deal was to align benefits with costs. In effect, EDS will be taking a piece by piece approach to refreshing the network.

"It doesn't have the same upfront bubble as other megadeals," said Ivins. While this approach was suitable for Bank of America, it does not necessarily apply to other financial institutions or other potential clients, he added. "What we're doing for each of them is unique," said Ivins.

Ivins said the contract also covered across the board tier one help desk support for the bank. However, this represents less than 10% of the deal.

A spokeswoman for the Bank of America said it had spoken to a number of IT services and telecommunications companies before settling on EDS. IBM Global Services had been among those considered for the contract, she said.

While the issue of start-up costs and their effect on EDS' finances has been hotly debated in the industry recently, the Bank of America spokeswoman said while this may have a consideration, the bank "evidently felt confident."

EDS this week has been flinging as much good news as possible into the market. On Wednesday it announced it was in final negotiations with Bank of Bermuda for a $375m, 12 year deal. It also announced contract extensions worth $240m with other existing clients.

© ComputerWire

Related story

EDS issues profit warning on United bankruptcy

Website security in corporate America

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.