Perot and EDS Grow, Avnet Adds CRM/Services Bundle, BearingPoint Narrows FocusBy John Moore | Posted 2005-02-15 Email Print
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Perot systems reported a spike in its quarterly revenue, as did EDS, though EDS revenues fell a bit and executives promised to invest as much as $1 billion in the company's growth. Avnet, meanwhile, will offer its channel a software/services CRM bundle to
Perot Systems Corp. on Tuesday reported a spike in both its fourth quarter revenue, its net income and a series of 2004 contract wins. The $466 million in revenue Perot Systems generated during the most recent quarter is an 18 percent increase over the year-earlier period. Net income surged 174 percent to $27.1 million. Part of that increase came from $1.5 billion in new contracts it signed during 2004, a third of which were finalized during the fourth quarter. The tally of new deals, which includes a $203 million pact with BT (British Telecom) and a $200 million contract with publisher Wolters Kluwer, is 19 percent higher than in 2003.
During a call with industry analysts, Perot Systems executives described some recent reorganization that, among other things, combined its commercial outsourcing and consulting groups into one line of business called Industry Solutions. Executives said their intent was to add the expertise consultants had built up in many industries to the company's commercial outsourcing business, which largely has focused on healthcare customers.
Peter Altabef, president and chief executive officer of Perot Systems, said the company plans to "increase the scope" of its commercial outsourcing business in vertical markets outside of healthcare, including manufacturing and construction/engineering.
The company also created a Technology Services business line, which includes its India-based TSI application management operation.
Electronic Data Systems Corp.'s fourth-quarter financial picture may be mixed, but its determination to invest in its own business certainly isn't; it plans to invest more than $1 billion to expand its business.
On Monday the company reported a net income for Q4 of $53 million. That's a big improvement compared to the loss of $337 million it suffered a year ago; but year-over-year revenue decline of 5 percent for the quarter overshadowed the uptick. Part of the deline may have been because some fourth quarter contract signings were pushed into 2005, according to a statement from EDS.
Mike Jordan, EDS' chairman and chief executive officer, said $450 million of the company's $1 billion-plus investment will target a joint venture company it is putting together with Towers Perrin. The contract for the joint venture, which will provide human-resources outsourcing services, should be signed during this quarter, according to a statement from the company. The venture is slated to contribute $250 million in incremental revenue to EDS this year.
Human resources outsourcing falls under the broader service line of business process outsourcing Bob Swan, EDS' chief financial officer, called BPO "a future growth engine for most services companies."
EDS executives said they will provide more details at the company's Feb. 22 analysts meeting.
Avnet Partner Solutions on Monday announced it would offer its resellers a full-service bundle to go along with customer-relationship management software from Microsoft. ^pThe bundle, dubbed CRM Advantage, includes the software, implementation services, and servers from either Hewlett Packard Co., or IBM Corp. The Microsoft CRM package is designed to help resellers reach markets or customers that were inaccessible without extra help implementing CRM software, said Tony Vottima, vice president of business development, Avnet Partner Solutions, Americas.
Except for a few vertical-market specialists, Avnet's resellers tend to focus on technical infrastructure rather than the full-service delivery of applications, Vottima explained. Microsoft CRM, however, would let them expand beyond that role with their current customers, Vottima said.
The company is also launching a project-management service that its resellers can offer, and Avnet Partner Solutions will fulfill.
After three months on the job,BearingPoint Inc.'s new chairman and chief executive officer has announced he's refocusing the company's consulting, development and systems integration services on a handful of vertical markets and various technologies.
A company the size of BearingPoint can't compete head-to-head in every industry with deep-pocketed companies like Accenture Inc. and IBM Corp. Rod McGeary, BearingPoint's chairman and chief executive officer said recently in a conference call with analysts. A company the size of BearingPoint can't effectively offer big-ticket outsourcing and business process outsourcing deals, McGeary said.
Instead the company will focus on four specific areas: public services (government and healthcare), financial services, consumer industrial and technology (consumer packaged goods, retail/wholesale, electronics software), and communications and content. The company's technology scope includes customer relationship management, enterprise resource planning, and supply chain management.
Even within its areas of focus, BearingPoint will narrow its range of targets. For example, the company's communication and content sector has struggled as spending among telcos has declined, McGeary said. So BearingPoint will focus within that vertical primarily on wireless networking and content providers.
DiamondCluster Sticks to Health Care
DiamondCluster International Inc. aims to make more of its money in what the company terms non-cyclical industry segments.
Among those is healthcare. Jay Norman, managing director of North America, told listeners during the company's fiscal Q3 analyst call that the company's healthcare business increased 53 percent during the most recent quarter compared to the year-earlier period. Healthcare contributed 12 percent of the company's revenue, ranking third among verticals behind financial services and insurance. Norman cited a contract win at a Blue Cross/Blue Shield provider as a recent healthcare win. That project is expected to continue through 2006. The company also plans to develop out a strategy to roll out operations in India during this quarter.