Siemens outsources IT - to itself

ATOS Origin tie-up mooted

For Sale sign detail

Siemens has handed over responsibility for its entire IT infrastructure to its struggling Siemens Business Services arm.

Under a three year plan, Siemens plans to save “hundreds of millions of euros” by handing the operation of all its units’ and regions’ IT infrastructure to SBS. At the same time, the firm said, SBS will benefit from additional business worth “several hundred millions of euros annually”.

The announcement came as Siemens announced it had sold its Germany-based hardware services operation, Sinitec, to maintenance operation a&o. At the same time press reports suggested Siemens was in discussions to merge SBS with fellow European services group, Atos Origin.

Offloading the maintenance arm while handing SBS work worth hundreds of millions of euros would be one way for Siemens to make SBS more attractive to any potential suitors.

The massive German engineering firm said it had already been working to harmonize IT platforms companywide, and said handing over its IT operation to SBS would allow the IT operation to be organized and operated under a shared services approach.

At the same time Siemens has given a massive boost to its loss-making services unit. SBS reported a loss of €25m in its first fiscal quarter of 2005, on sales of €1.3bn. New orders were €1.9bn. The company put the loss down to an unfavourable revenue mix.

A Siemens Business Services was said the company did not comment on rumours, but said the deal with its parenting company was a "forward looking strategy".

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