The global outsourcing deal between Royal Dutch Shell and AT&T, EDS and T-Systems, originating in Europe, puts to rest fears about the U.S. recession impacting the flow of large outsourcing deals. To top that, two of the beneficiaries of the deal are U.S.-headquartered global companies.
Under the terms of the five-year, $1 billion IT master services contract, EDS is expected to deliver Royal Dutch Shell (Shell) a substantial business improvement. As part of the deal, EDS will manage Shell's end-user computing services including desktop, service desk, on-site services, back-up and disaster recovery, mobile information protection and managed messaging services, for 150,000 users in over 100 countries across its global operations. To reduce management complexity for Shell, EDS will also act as operational integrator, collaborating closely with Shell's other key IT suppliers. Approximately 1,500 IT professionals, including Shell full-time employees and contractors currently working for Shell, will join EDS, in 65 countries globally. Services in some joint ventures remain outside the scope of this agreement.
The company has asked EDS to apply their broad experience and act as operational integrator toward Shell's other key partners, according to Alan Matula, Executive Vice President and Chief Information Officer, Shell. Shell demands consistent and agile IT support to operate in a competitive global industry, and expects from EDS to fulfill the demand, he adds.
Aspects of the agreement are supportive of Shell's goal to lead its industry in technology and business functionality. EDS will work closely with its EDS Agility Alliance partners Microsoft, SAP, Xerox, Sun and EMC to deliver products and services to Shell.
The deal has been inked with supporting agreements being signed concurrently in Shell's four IT delivery hubs – the Netherlands, the U.K., Malaysia and the U.S.
Under the term of the five-year, $1.6 million outsourcing deal, Shell's 560 networking employees will become AT&T employees. And, AT&T will provide telecommunications and networking services to the oil company. As part of the agreement, AT&T will manage Shell's communications infrastructure and mobile services, and will handle the networks of Starbucks, GM and IBM. In fact, AT&T will also be looking after Shell's wide area and local area networks, voice services, mobile service and managed security, and will deliver connectivity to Shell's 1,500 corporate and operating units. The company will also provide 600 separate third-party deals with 300 providers worldwide.
Under the condition of $1.6 billion deal, T-System will provide hosting and storage services to Shell, and will run Shell's data centers including three in the Netherlands, one in Malaysia and one in the U.S. T-Systems will host most of Shell's SAP instances. Shell has more than 7,400 application servers. Shell will transfer 900 employees to T-Systems.