Shopping for a $2 Billion Deal

By Joseph C. Panettieri  |  Posted 2004-03-16 Email Print this article Print
 
 
 
 
 
 
 

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Computer Sciences Corp. (CSC) pursues $2B 10-year technology outsourcing agreement with Sears (S) for desktops, servers and Web site infrastructure; Home Depot (HD) goes wireless.

Is Sears, Roebuck and Co. sold on Computer Sciences Corp? The answer to that question could be worth $2 billion over 10 years to CSC.

The consulting firm and Sears say they have "agreed to enter into negotiations" on a potential outsourcing contract under which CSC will provide Sears with "start-of-the-art Information Technology infrastructure support services." CSC and Sears both say that they anticipate "successful completion of negotiations" and a final agreement is expected in the second quarter of this year.

Under terms of the proposed deal, CSC would provide Sears with desktops, servers, Web site infrastructure, voice and data networks, and decision support technology. Roughly 260 IT employees from Sears would likely transition to CSC. All told, the contract is expected to fetch CSC approximately $200 million a year for up to 10 years.

Sears isn't the only retailer taking a hard look at its technology infrastructure. The Home Depot Inc. expects to boost IT spending roughly 10 percent this year, according to recent reports from Dow Jones Business News. The upgrades include 39,500 wireless bar-code scanners from Symbol Technologies Inc.

The devices resemble small sci-fi laser guns, and allow cashiers to roam up to 150 feet from point-of-sale registers to complete transactions and assist shoppers. Stratix Corp., a solutions provider with extensive retail applications expertise, assisted Symbol and Home Depot with the project.

During a recent visit to a Home Depot in Commack, Long Island, cashiers told me they give the wireless scanners an enthusiastic "thumbs up."

Deal 2 – Calling All HP Partners: Avnet Hall-Mark has launched Market Connection, a partner program that provides timely IT market research to HP solutions providers. The information, culled from International Data Corp. (IDC) and other market researchers, covers such topics as server migrations and open systems.

Ideally, Market Connection will allow HP partners to recognize and capitalize on IT trends before competitors have time to react to market shifts.

It's a nice concept, but be sure to keep the market research in perspective. Many reports are accurate and informative, but some have promised fools gold. Remember all those glowing predictions for Asynchronous Transfer Mode (ATM) and Fiber Distributed Data Interface (FDDI) in the early 1990s? Some research firms made serious cash selling the virtues of ATM and FDDI, but faster and faster Ethernet variants steamrolled both technologies.

Deal 3 – United for Safety's Sake: GTSI Corp. has partnered with more than a dozen companies to launch the Physical Security Alliance. Vendors and solutions providers in the alliance will attempt to strengthen physical security boundaries for their mutual corporate and government customers.

Specifically, the partners will focus on force protection, homeland security protection, physical security protection, automated video surveillance, computer vision, physical and logical access control, identity management, biometrics, smart card, smart door, cyber security and weapons of mass destruction detection.

Alliance members include DMJM Technology, ISR Solutions, Lenel Systems International, Equis Corp., BNX, Cisco Systems Inc., Defense Group Inc., Digital Persona, Griffid, Intel, NetBotz, ObjectVideo, Panasonic, Seneca, StorageTek, Trident Tek and videoNEXT.

Deal 4 – The Linux Odd Couple: Former Novell Inc. CEO Ray Noorda often spoke of "coopetition" – the need to both compete and cooperate in the IT marketplace. Such is the case at IBM Corp. and Hewlett-Packard Co., which are sponsoring a Linux road show for Red Hat Inc. The tour will have stops Tokyo, Brisbane, Sydney, Munich, London, Boston and Toronto. The Boston event is scheduled for March 29 at the Hotel@MIT in Cambridge, Mass. For a complete schedule, visit http://blogs.redhat.com/.

Although IBM enjoys strong mind share in the Linux marketplace, HP deserves at least equal billing in the open-source sector. Indeed, HP sold $2.5 billion worth of Linux-related hardware, software and services in 2003, according to the company's financial statements.

You can't help but wonder how IBM and HP will share the spotlight during Red Hat's road show.

About Contract Watch: Each week, this column examines customer engagements that are stirring the channel, and the solutions providers behind them. Our goal is to strip away the hype and tell you what's really selling—and what isn't—in today's IT marketplace. Send your tips to my e-mail address below.

Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at joe_pan5@yahoo.com.

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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