Outsourcing mega-deal finalised

Outsourcing giant EDS has partnered with Microsoft to secure the biggest IT services contract in New Zealand's history with the two companies to support Telecom New Zealand's IS functionality and develop its online capabilities.

Worth in excess of $NZ1.5 billion ($1.2 billion) over 10 years, the deal comprises an alliance between EDS, Microsoft and Telecom New Zealand, and the acquisition of equity in EDS NZ by Telecom New Zealand.

EDS will employ approximately 600 staff involved in managing Telecom NZ's current IS requirements, which include its enterprise applications, technical infrastructure, billing and customer information systems and IS assets.

The equity agreement will see Telecom purchasing an initial 10 per cent share in EDS New Zealand, with the option of extending its holding to 49 per cent over a four-year period.

Patrick Pilcher, research manager at IDC New Zealand, claims the long-term effects of the deal are expected to be felt across the country. Benefits include a faster adoption rate of telecommunications and online applications, and the development of new skill sets.

According to Pilcher, the EDS Telecom deal will provide Microsoft with a much-needed, high-profile reference site for its NT initiatives, in addition to online applications and online application development environments.