IBM Shortens Staffing List; Wipro Gets into Embedded Linux

By John Moore  |  Posted 2005-07-27 Email Print this article Print
 
 
 
 
 
 
 

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IBM shifts contract for staffing to Analysts International after Keane leaves the picture, as study shows HR is the fastest-growing BPO segment. Meanwhile, Wipro joins Empower in an effort to sell Linux devices.

Analysts International on Tuesday said that it has captured a staff augmentation contract from IBM, two weeks after Keane Inc. announced a decision to drop its staff augmentation work at IBM.

A spokesperson for Minneapolis-based Analysts International said the company will provide staffing in a broad range of technical areas.

The company believes that its relationship with IBM going forward will be "more of a partnership and a little more strategic than it had been previously," the spokesperson said.

Keane on July 13 announced plans to withdraw from its staff augmentation relationship with IBM.

Brian Keane, the company's president and CEO, cited a "recent change in [IBM's] direction" in the company's decision to wind down the IBM work, but he did not elaborate.

Speaking during a recent earnings call, he said the move will let Keane concentrate on areas better aligned with the company's strategy.

Keane reported its current annual revenue run-rate for the IBM business at about $28 million. The company generated $40 million in IBM-related revenue last year.

John Leahy, Keane's chief financial officer, said Keane did about $8 million in IBM business in the first quarter. Keane said during the earnings call that he expects the company's business with IBM to drop by $1 million to $2 million per quarter.

Are the two events—Analysts International's new contract and Keane's departure—related?

The Analysts International spokesperson said he "knows of no such connection, nor of any reason to assume that there would be a connection." Keane, meanwhile, points to its recently captured $367 million contract in the Australian state of Victoria as the model for the type of business it plans to pursue. Keane will develop and manage a transportation ticketing system for Victoria. The project exemplifies the vertically oriented, integrated solutions the company now seeks to build.

Wipro Inks Embedded Linux Deal

Empower Technologies has selected Wipro Ltd. as its authorized service provider and integrator for its embedded Linux product.

The arrangement focuses on Empower's LDK5910, a development kit for the company's LEO (LinuxDA Embedded O/S) for Texas Instruments' OMAP5910 dual-core processor.

Mark Janke, a business development manager at Empower, said the development kit is designed to help hardware designers create specialized handheld devices. A customer could use Empower's product to build, for example, a customized PDA for the medical market.

Empower reported on Monday that it had signed a letter of engagement with Wipro. Under the agreement, Empower will tap into Wipro's outsourcing client base to promote the LDK5910.

Wipro will provide third-party development and support. In addition to consulting fees, Wipro will receive a portion of the LinuxDA Embedded OS licensing fee.

Empower in May released the LDK5910 as its latest LEO development platform.

Wipro is a member of the Embedded Linux Consortium, a vendor-neutral trade group that promotes Linux in the embedded, applied and appliance computing sectors.

HR Outsourcing Leads BPO.

HR Outsourcing Leads BPO

Human resources outsourcing is seeing the greatest customer demand, according to a poll conducted by EquaTerra Inc., which provides outsourcing advisory services.

EquaTerra queried its 170-plus advisers as well as outsourcing services providers regarding trends in the second calendar quarter. The adviser survey placed HR outsourcing at the top of the BPO (business process outsourcing) segments, followed by financial and accounting outsourcing and IT outsourcing.

The advisers, who work with clients in North America, Europe and Asia/Pacific, identified payroll, benefits administration, and HR IT as the leading human resources outsourcing subsegments.

Service providers, meanwhile, cited human resources and finance, accounting and administration as the two hottest BPO segments, with human resources extending a lead over finance in the second quarter compared with the first quarter. The providers identified payroll and benefits administration as the leading subsegments in human resources outsourcing. Recruiting and HR IT followed.

The advisers and service providers had differing opinions on the industries displaying the strongest BPO demand. The advisers ranked the utility/energy sector as the leading industry segment, followed by consumer packaged goods and banking/insurance/financial services. Service providers listed automotive manufacturing on top, followed by consumer packaged goods and banking/insurance/financial services.

The service providers also described an increase in the level of expected re-competes and renegotiations in the second quarter. That finding is consistent with market watcher TPI's report earlier this month. The company stated that 20 percent of the value of outsourcing deals inked in the first six months of 2005 represented restructured contracts as opposed to entirely new awards.

In recent research, Stan Lepeak, managing director of research at EquaTerra, said he also has detected a shift from "lift and shift" to "outsource and transform" as customers' preferred outsourcing business model.

Historically, a customer would hand over an area such as accounts payable and the outsourcing vendor would run it at a steady state, Lepeak said. "How do I improve this process or make it best in class didn't enter into the equation," he said.

Cost savings didn't always prove to be significant, so the main customer benefit was unloading a troublesome business function as much as anything else, he added.

More recently, however, the outsourcing conversation has turned to the pursuit of dramatic process improvement, Lepeak explained. He called this "true outsourcing," in which a third-party expert helps the customer meet major process improvement objectives.

Avnet Celebrates a Different Kind of Spam

When Avnet Inc. marked its 50th anniversary last week, Jon Avnet – producer of "Spamalot" – was in attendance.

Avnet is the grandson of the late Charles Avnet, who co-founded Avnet Electronic Supply Co. Avnet's production credits include the Monty Python-inspired Arthurian Broadway musical, "Risky Business," and "Sky Captain and the World of Tomorrow." He also directed "Fried Green Tomatoes" and "Up Close and Personal."

During the anniversary event, Avnet, company CEO Roy Vallee, and Phoenix payer Phil Gordon opened the Avnet Technology Museum. The museum features, among other things, a 1985 DEC MicroVax II.

Given the cinematic backdrop, a DEC PDP-8 may have been a more appropriate artifact. The computer appeared in "Three Days of the Condor."

 
 
 
 
John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.

 
 
 
 
 
























 
 
 
 
 
 

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