Fujitsu’s Dirk Weigel and the Pfandbriefbank’s Kai Wolf held a teleconference today describing the latter’s move to outsource its IT infrastructure to the former. It’s interesting in light of the traditional reluctance of German businesses to outsource and the slowness of outsourcing business for major vendors in the recession (at least in comparison with the last downturn from 2001-2002). The bank (one of the largest in Germany) has made a relatively quick decision to outsource its data centres, servers, networking and end-user computing in a contract that is worth approximately €100 million over a five-year period. It is expecting a cost-saving of around 20% as a result. The bank has decided to retain responsibility for its applications. Fujitsu won the contract in competition with IBM and T-Systems. Fujitsu will be taking over the 50 or so staff currently employed by the bank, of which the majority are in Germany. It also has staff in the UK, Ireland, New York and the Netherlands. It is interesting that Fujitsu will use some of its off-shore (or rather ‘remote’) resources in Russia and Poland to provide support. Fujitsu doesn’t currently break out the revenues it makes from outsourcing, but if we look at vendor revenues from EDS and IBM we can see that there has been no great upsurge in the last year. In general I believe this is because a) most large data centres have already been outsourced and b) the standardisation of technology has made technology easier to manage internally. If we look over the horizon Cloud Computing will take on much of the role of Outsourcing – but without the need to move staff from user to vendor and with all the services being delivered remotely. My take on this latest announcement is that it has very little to do with Cloud (at least not yet). German IT managers and CEOs have been traditionally very reticent to outsource – at least in comparison with the UK, which accounts for as much as 50% of European activities. It’s possible that we’ll now see a German trend associated with the recession and akin with the overall European growth in outsourcing found in the last downturn. Outsourcing of course has the advantage of turning large capital budgets into operational ones. Do you know of any other examples of new outsourcing in the recession? Please let me know by commenting on this article.
Information Technology and Communications research
