Telstra awards $1.19 billion of services deals

By Ry Crozier on Jun 11, 2009 1:51 PM
Filed under Services

EDS and Infosys will pick up the lion’s share of application development and maintenance contracts up for grabs after Telstra dumped Satyam in March.

The telco announced today that "expanded" contracts worth $450 million over five years had been awarded to EDS and Infosys following a tender process.

The contracts form part of Telstra's ongoing IT transformation project.

The EDS part of the deal, worth $190 million with "opportunities of up to $334 million", is one of the largest application engagements the HP-owned services company has signed this year in Australia.

It covers applications development and management services for Telstra's critical business applications.

EDS said it will use its "best shore strategy" to provide services from the right place, at the right time - using local or offshore staff, depending on the development requirements.

"Telstra should receive significant cost savings from the EDS global delivery model," said David Caspari, managing director of Australia and New Zealand at EDS.

Infosys did not formally break out the financials of its agreement but like EDS it confirmed the agreement includes a "sizable" discretionary spend over the next five years.

Also today, Telstra said it renewed an IT operations services agreement with IBM for an estimated $745 million over five years.

IBM said in a separate statement the deal was inked back in May.

The agreement with IBM covers data centre mainframe operations, a proportion of "midrange operations" and maintenance.

It aims to achieve greater automation and improved remote management capability of Telstra's IT systems.

IBM said part of this will involve the creation of a "factory approach" consisting standard, repeatable processes to build and configure new servers for Telstra.

Big Blue said it will implement a standard set of processes and tools across more than 3,000 servers at the telco.

All three services organisations to win deals today already held contracts with Telstra.

These latest agreements either renew or build on those arrangements.

A spokesperson for Telstra told iTnews the new contracts will not result in any change to the timeline of Telstra's IT Transformation plan.

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