Gen-i shows it will compete on price

Genesis opts for merged entity, incumbent not even short-listed

Gen-i has disclosed its hand in a highly cross-leveraged bid to win an outsourcing contract at Genesis Energy. Sources close to the bidding process say Gen-i pitched its bid at more than 35% lower than the next lowest bidder, believed to be Oxygen.

Fujitsu was the third company to make the shortlist. The incumbent, Axon, wasn't shortlisted, apparently on price.

Genesis went to re-tender for its outsourced desktop and server infrastructure because it wanted to broaden the scope of services.

The power company won’t confirm the contract at this stage, saying negotiations are in train and a signature is at least three weeks away.

The implications for the IT services sector are huge. Gen-i — the brand for the merged Telecom Advanced Solutions and formerly independent Gen-i — has clearly been prepared to discount hugely on services by leveraging against the telco side of the business. The deal may also have implications for Vodafone, which is the mobile supplier for Genesis.

The industry will now be watching closely how the merged operation executes on delivery. If Gen-i has no delivery problems within the complexity of the merger, other service providers are going to have to revisit what competitive advantages they can offer.

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