Telecom eyes the cloud for outsourcing

The face of computing is about to change in New Zealand.

Telecom is about to select an outsourcer to replace the 10-year, $1.5 billion contract signed with EDS in 1999. Though that contract was extended in 2001 out to 2012, any penalties for an early exit are outweighed by Telecom’s future plans.

It’s all about software as a service and the cloud, sources say.

Rather than go to direct tender, Telecom has built a set of requirements that potential outsourcing partners will have to meet. One or two will be chosen for what’s likely to be another 10-year contract.

There have been persistent rumours circulating about Telecom outsourcing to IBM and that other companies have done due diligence on the company’s ICT services unit, Gen-i.

The reality is that IBM is just one company courting Telecom, at the highest corporate level. Hewlett-Packard is another. There has also apparently been interest shown by the large Indian outsourcing companies.

Internally at Telecom the change has been positioned as part of the company’s multi-million dollar transformation project. The cloud is the key. Computerworld has been told that the successful party and Telecom/Gen-i will build the new operation together.

This is thought to be the first time in New Zealand that there has been genuine, substantial investment in the cloud. And the effort will also likely result in a cloud product that can be taken to market.

Gen-i will probably be the vehicle for that, Computerworld understands

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