HP to push for more outsourcing deals in Asia
The company signed US$500m in key Asia-Pacific outsourcing wins in the last six months alone. Raju Chellam finds out more
US giant Hewlett-Packard Company will push for IT and BPO (business process outsourcing) deals in telecommunications, financial services, retail and government sectors more aggressively in the Asia Pacific region this year.
The aim is to grow at a much faster pace than the overall market growth in the outsourcing space, HP Services' Singapore-based vice-president of managed services for the Asia-Paci fic, Soh-Keng Tan, told BizIT.
'Over the last six months we have closed managed services deals close to US$500 million in total contract value in the Asia-Pacific region outside of Japan,' Ms Tan said. 'This includes global contracts in the Asia-Pacific, as well as our Asian wins. Our managed services business in the Asia-Pacific has grown 33 per cent this fiscal year. We intend to build upon this momentum and grow faster than the market rate.'
In FY03 ended October, about 5,000 staff transi tioned to HP from its outsourcing customers, including 1,000 in the Asia-Pacific. 'Over the last four months, we moved 1,000 people to our rolls, including 200-odd in Singapore,' Ms Tan said. 'Singapore is the headquarters for a lot of MNCs, so a lot of deals are done here. The MNCs see HP as a strong service provider to help them roll out outsourcing in the region.'
She cited GE Medical as a good example of a deal won and signed in Singapore. GE Medical Asia signed a three-year, multi-million dollar deal to outsource helpdesk, support infrastructure and server and network management to HP. The contract has HP manage 6,000 computers, 300 servers, voice, wireless and local area networks.
HP's largest outsourcing win so far is with Procter & Gamble. The 10-year deal is worth US$3 billion and has resulted in 1,850 P&G employees in 50 countries moving to HP worldwide. P&G outsourced its data centre operations, network management, desktop and end-user support and applications development to HP in a concerted bid to cut costs and boost efficiency in its core manufacturing business.
'We selected HP for its global IT expertise, services quality, cost and collaborative approach,' said Filippo Passerini, P&G's global business services officer. 'HP will help us substantially lower costs and accelerate innovation through out P&G.'
HP's Palo Alto-based senior vice-president of managed services, Uli Holdenried, told BizIT that the company's managed services grew 36 per cent in its Q4 ended October 2003 year-on-year. 'For the whole year, it was 22 per cent,' Mr Holdenried, 52, who was recently in Singapore, said.
The overall services business - including consulting, integration, managed services, and customer support - contributed US$12 billion to HP's US$73.1 billion in global annual revenues.
Another mega-win was with Swedish telcom giant Ericsson AB. This multi-year deal was worth US$1 billion and was the largest outsourcing deal in Sweden. It has HP taking over Ericsson's global IT infrastructure and mainframe opera tions in more than 140 countries, with about 1,000 Ericsson staff moving to HP.
'Most of these large deals - Agilent, Ericsson, P&G - were won earlier in the year, but their implementation and transfer of employees happened in July, August and September,' Mr Holdenried said. 'That's why it's kind of backend-loaded. The growth rate of the business has accelerated because the deals and therefore the revenues came on line towards the end of the fiscal year.'
The market for IT services - of which outsourcing is the biggest component - crossed US$10 billion in eight key Asian markets - Singapore, Malaysia, Hong Kong, Taiwan, South Korea, China, India and Australia - in H1 2003, up 7.6 per cent over H2 2002, according to IDC Corp. IBM Global Services took the lion's share of 10.3 per cent in revenues in the eight Asian markets, followed by HP's 6.5 per cent, Electronic Data Systems' 5 per cent, Samsung's 3.7 per cent, and Computer Sciences Corp's 3.6 per cent.
IT services is an umbrella term that includes IT outsourcing, infocomm consul ting, systems integration, data hosting services, customised application development, software deploy ment and support, training, hardware support, and network integration.
Singapore's market for such services was worth US$598.9 million in H1 2003, up some 2 per cent over the previous six-month period, IDC added.
TheBusinessTimes
US giant Hewlett-Packard Company will push for IT and BPO (business process outsourcing) deals in telecommunications, financial services, retail and government sectors more aggressively in the Asia Pacific region this year.
The aim is to grow at a much faster pace than the overall market growth in the outsourcing space, HP Services' Singapore-based vice-president of managed services for the Asia-Paci fic, Soh-Keng Tan, told BizIT.
'Over the last six months we have closed managed services deals close to US$500 million in total contract value in the Asia-Pacific region outside of Japan,' Ms Tan said. 'This includes global contracts in the Asia-Pacific, as well as our Asian wins. Our managed services business in the Asia-Pacific has grown 33 per cent this fiscal year. We intend to build upon this momentum and grow faster than the market rate.'
In FY03 ended October, about 5,000 staff transi tioned to HP from its outsourcing customers, including 1,000 in the Asia-Pacific. 'Over the last four months, we moved 1,000 people to our rolls, including 200-odd in Singapore,' Ms Tan said. 'Singapore is the headquarters for a lot of MNCs, so a lot of deals are done here. The MNCs see HP as a strong service provider to help them roll out outsourcing in the region.'
She cited GE Medical as a good example of a deal won and signed in Singapore. GE Medical Asia signed a three-year, multi-million dollar deal to outsource helpdesk, support infrastructure and server and network management to HP. The contract has HP manage 6,000 computers, 300 servers, voice, wireless and local area networks.
HP's largest outsourcing win so far is with Procter & Gamble. The 10-year deal is worth US$3 billion and has resulted in 1,850 P&G employees in 50 countries moving to HP worldwide. P&G outsourced its data centre operations, network management, desktop and end-user support and applications development to HP in a concerted bid to cut costs and boost efficiency in its core manufacturing business.
'We selected HP for its global IT expertise, services quality, cost and collaborative approach,' said Filippo Passerini, P&G's global business services officer. 'HP will help us substantially lower costs and accelerate innovation through out P&G.'
HP's Palo Alto-based senior vice-president of managed services, Uli Holdenried, told BizIT that the company's managed services grew 36 per cent in its Q4 ended October 2003 year-on-year. 'For the whole year, it was 22 per cent,' Mr Holdenried, 52, who was recently in Singapore, said.
The overall services business - including consulting, integration, managed services, and customer support - contributed US$12 billion to HP's US$73.1 billion in global annual revenues.
Another mega-win was with Swedish telcom giant Ericsson AB. This multi-year deal was worth US$1 billion and was the largest outsourcing deal in Sweden. It has HP taking over Ericsson's global IT infrastructure and mainframe opera tions in more than 140 countries, with about 1,000 Ericsson staff moving to HP.
'Most of these large deals - Agilent, Ericsson, P&G - were won earlier in the year, but their implementation and transfer of employees happened in July, August and September,' Mr Holdenried said. 'That's why it's kind of backend-loaded. The growth rate of the business has accelerated because the deals and therefore the revenues came on line towards the end of the fiscal year.'
The market for IT services - of which outsourcing is the biggest component - crossed US$10 billion in eight key Asian markets - Singapore, Malaysia, Hong Kong, Taiwan, South Korea, China, India and Australia - in H1 2003, up 7.6 per cent over H2 2002, according to IDC Corp. IBM Global Services took the lion's share of 10.3 per cent in revenues in the eight Asian markets, followed by HP's 6.5 per cent, Electronic Data Systems' 5 per cent, Samsung's 3.7 per cent, and Computer Sciences Corp's 3.6 per cent.
IT services is an umbrella term that includes IT outsourcing, infocomm consul ting, systems integration, data hosting services, customised application development, software deploy ment and support, training, hardware support, and network integration.
Singapore's market for such services was worth US$598.9 million in H1 2003, up some 2 per cent over the previous six-month period, IDC added.
TheBusinessTimes
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