Industry news

Cloud computing is an important and growing platform for Instant-On Enterprises, where everything and everyone is connected.

While cloud computing delivers benefits such as faster deployment of new services, reduction in IT headcount and a pay-as-you-go model, it has traditionally lacked in areas that enterprises need, such as security, availability and ease of integration.

The new HP Hybrid Delivery solutions provide the benefits of enterprise-grade cloud computing, while meeting the specific needs of businesses and governments.

“Cloud computing is going mainstream and HP is leading the way,” said Ann Livermore, executive vice president, HP Enterprise Business. “HP has the enterprise experience, breadth of portfolio and global service delivery organization to lead our clients through this transformation.”

HP Hybrid Delivery cloud solutions: Cloud for the enterprise

HP Enterprise Cloud Services-Compute delivers “private cloud as a service” from HP’s state-of-the-art data centers. Governed by specified policies for service, performance, security and privacy, it provides clients with rapidly deployed, secure computing with scalable IT capacity. Built on HP’s leadership in Converged Infrastructure and the breadth of HP’s software portfolio for automation and management, it delivers all the resources necessary to access a hybrid private cloud.

HP CloudSystem is the most complete, integrated system to build, manage and consume services across private, public and hybrid cloud environments. It combines the strength of HP’s Converged Infrastructure with the established leadership of HP Cloud Service Automation software to deliver unified security, governance and compliance across applications, as well as physical and virtual infrastructure.

HP CloudSystem also supports HP Cloud Maps, an industry first that provides preconfigured catalog objects to automatically provision the optimized application and infrastructure resources. HP CloudSystem enables new cloud services to be up and running in minutes.

HP Cloud Discovery Workshop helps businesses and governments develop smart strategies and the optimal path for leveraging the cloud. The one- or two-day workshops have multiple modules that cover a wide range of topics, including business model implications, security and identifying the right services for the cloud. The workshops are led by seasoned HP professionals with experience and expertise in global cloud deployments.

HP Financial Services are available for clients building private cloud deployments who want to minimize capital requirements. HP can combine its cloud offerings with financial offerings from HP Financial Services helps clients maximize their financial goals in parallel with their pursuit of advanced technologies.

Around 80% of government departments are locked into outsourcing contracts, according to analysis of government contracts from price measurement firm ProBenchmark.

This means the government's push for savings in many cases is unrealistic, said ProBenchmark sales director Simon Scarrott. "These are 3rd and 4th generation contracts where professional procurement have run expensive multi-tender processes, which has taken the majority of the 'fat' out of the charges," he said.

The total cost of re-tendering in the current round of public sector cuts could be over £200 million, said the analysis.

In many cases the cost of this process to the government and to the vendors involved were collectively higher than the short to midterm savings, said Scarrott.

"If a deal is close to market price and fit for purpose then informed re-negotiations could bring a fresh, invigorated and effective deal in far less time (approximately 80% faster) and for a fraction of the cost (to all parties)", he said.

Source: http://www.computerweekly.com/Articles/2011/01/24/245058/Government-departments-locked-into-outsourcing-contracts.htm

The VPN provides Morgan Crucible with a single network and platform to deliver voice, data, video and applications. It is able to use a single infrastructure to connect branch offices, headquarters, remote users and third parties such as suppliers and customers.

Morgan Crucible highlight that these services enable the deployment of applications across more than 80 sites in Europe, Middle East, Africa, Asia Pacific, Canada, Latin America and the US, whilst maintaining seamless communications across the entire company.

"As a global company, protecting our business-critical infrastructure is one of our top priorities," said Kevin Dangerfield, chief financial officer for Morgan Crucible.

"AT&T has been committed to delivering a solution that is not only highly-reliable but also enhances productivity and streamlines our operations across the globe".

By outsourcing its online infrastructure, the company claims it has been able to extend the reach of its IT team and as a result deliver additional value to the business.

Further to this, Morgan Crucible is employing an application traffic analyser service. It is hoped that by doing this it will be able to better monitor the network performance and avoid any system irregularities across its global sites.

This is well known territory for AT&T who as an international network operator uses a traffic analyser on a far greater scale at their Global Network Operations Centre in New Jersey. Similarly, this picks up any network nodes that are experiencing anomalies or unusual amounts of increased traffic.

"A global integrated communications network is essential for an industry leader like Morgan Crucible," said Dave Langhorn, AT&T sales centre vice president for the UK.

"Our services and solutions can support and improve their competitive advantage and deliver consistent global architecture to allow them to communicate efficiently and cost effectively".

Tourvest Duty Free (TDF) has won the inflight retail contract for flagship carrier British Airways. Three operators submitted bids for the contract—Alpha Flight, Duty Free Air and Ship Supply (DFASS) and TDF—after an invitation to tender was issued by the airline in the first half of last year.

A memo to suppliers from BA Inflight Retail stated: “It is BA’s intention to outsource inflight retail to Tourvest in [the second half] of this year. As a result, product listings commencing or ongoing at July 1 will be jointly reviewed by BA and Tourvest. Therefore, listings that commence May 1 can only be guaranteed for May and June.”

An official statement from BA said: “We are looking to reduce the complexity and cost of our inflight retail operation and believe outsourcing it to another company will deliver benefits both to our customers and to ourselves. We expect to complete the switch in the second half of 2011. In the meantime there will be no change to what our customers experience on board.”

The tender was issued in the first half of last year as BA announced record annual losses of £531m ($850m), the worst since the group was privatised in 1987. Since then it has made a remarkable recovery, recording a profit of £158m ($253m) in the six months to September 2010 and reversing a loss of £292m ($467) for the same period the year before. The growth was driven by higher pricing driven by long-haul premium traffic rather than growth in passenger numbers, according to analysts.

Source: http://www.dfnionline.com/article/British-Airways-to-outsource-inflight-retail-programme-1860779.html

We’ve also seen a lot of M&A activity, which has resulted in fundamental organisational change in the industry. This too has affected decision makers in these organisations, many of whom have either moved up, on or out. This trend is particularly prominent in the UK life insurance industry.

However, most financial services companies are now aware that they need to start moving forward and offering new products and services – the worst of the crunch is (hopefully) over and it’s time to embrace change and rebuild market share. This will be a good thing for outsourcers.

For instance, the demand for OPAL’s services has been steadily increasing – particularly because of our ability to help financial services companies launch products quickly. We see this as part of a wider realisation within the industry that outsourcers can share the risk of implementing solutions. Once the period of hiatus caused by the stalling economy settles down over the next 12-18 months we predict a surge of new products and services.

Outsourcing certainly seems to have moved to the top of the agenda for decision makers whereas, in the past, it had been regarded as a last resort when organisations wanted to give a problem to someone else. Now, financial services’ decision makers are taking it seriously as a strategic option.

The impact of the crisis and downturn upon providers, in terms of their offerings to their existing financial services clients, was mainly surrounding ‘business retention’. This has always been a buzzword used in the industry but very few FS organisations had taken it seriously enough. However, business retention is now considered an economic necessity and companies are focusing on their client bases and trying to figure out how to retain customers and offer new products and services to them.

The industry is much more aware of regulation and its impact and it is becoming far more ingrained in what they do. Outsourcers are becoming more compliance-savvy as well. As such, the crisis is likely to provoke an improvement in customer experience over the longer term. It is harder in this climate to recruit new customers and so retention of current customers is vital.

With new technologies available, a savvier consumer base and new players such as Tesco and Virgin coming into FS with a clean slate and not hampered by legacy systems, the old dinosaurs are now going to have to wake up. These new players are able to create financial services offerings from scratch, looking at the industry from a much stronger retail perspective. Outsourcing will have a huge role to play in this, as these new players are unlikely to want to build expensive, cumbersome back offices from scratch.

As things pick up, we will see a much more competitive market – which is good news for the customer. At some point the industry will need to wake up to social media and find a way to engage with it. Regarding outsourcing, large FS institutions are going to ask themselves if they still want to have vast empires of resources or look to specialist outsourcers who are able to help them to meet these new challenges.

Tony Collins, CEO, OPAL, the financial outsourcing company www.opal-uk.com

Hosting company Rackspace is hoping to allay customer concerns about where their data is held with the launch of a UK-based cloud infrastructure.

With businesses subject to strict regulations about where data is held and how it is moved, cloud computing has been off the agenda for many organisations because most services are hosted outside the UK.

Rackspace has operated European-based datacentres for their hosting services for some time but has lacked cloud capabilities based in the region. The company has more than 100,000 customers using its cloud services globally.

By locating cloud infrastructure in the UK, Rackspace will provide cloud-based storage and processing to customers without data leaving the country, something analysts believe is an important move.

"Geographical location of data is important. A lot of the US vendors don't appreciate that having a cloud-based infrastructure that's located geographically in the US means that almost all European countries have data that they can't possibly shift there legally," Freeform Dynamics analyst Tony Lock told silicon.com.

Lock added that the UK-based cloud infrastructure is "an essential first step" for Rackspace if it is to attract more customers from within the European Union.

"It makes it easier to get over some of the inhibitors that people put up there. It's definitely good from that point of view. There are lots of inhibitors to cloud adoption - this removes one of them for UK-based organisations," he said.

Quocirca analyst and director Bob Tarzey agrees that the launch is important for Rackspace, as it will give it an advantage over rivals.

"Rackspace is positioning itself as a global cloud service provider. To do this effectively, it needs to have global infrastructure and offer service-level agreements that data will be managed and stored within certain geographic limits. Its ability to do this will give it another value-add over the wholesale cloud infrastructure vendors, like Amazon and Google," he told silicon.com.

However, Tarzey added that Rackspace will face stiff competition from local hosting providers, such as Attenda and Savvis, which already have proven cloud-based systems in the UK.

The services available in Rackspace's UK cloud infrastructure include the Cloud Files storage service and Cloud Server computer processing technology, which can support Windows and a number of Linux distributions.

With management an important element in cloud computing, Rackspace has integrated the Cloudkick infrastructure-management dashboard technology into these cloud services, allowing customers to...

"Our UK offering allows companies to avoid offshore data issues and weighty upfront capital investments, which helps them become more strategically agile from a business perspective," Rackspace president and CEO Lanham Napier said in a statement.

He added that the UK-based cloud infrastructure will reduce latency for European companies using Rackspace cloud services compared with when the services were hosted in the US.

However, Rackspace and other cloud providers still have issues to overcome to drive uptake of cloud services.

Freeform Dynamics' Lock cited the need for businesses to know if data stays in Europe in the event of the UK-based cloud infrastructure's failure, and whether it could be released as part of the Patriot Act, to which Rackspace would be subject as a US-based company.

The company will also need to inform customers about how they can extract data from cloud services if they decide to move to another provider or bring the data back inhouse.

"Getting into cloud is easy; getting out of cloud could be difficult. Therefore Rackspace has got to show people that it's got a way to move off if you want to. People want to know, 'If I move to a particular supplier, how do I move out again if I want to change?'" Lock said.

Another potential improvement is for the service-level agreements for cloud services to be brought up to the same standard as hosted services, which would build business confidence in the reliability of cloud computing.

Source: http://www.silicon.com/technology/software/2011/01/21/rackspace-uk-cloud-aims-to-allay-data-concerns-39746849/1/

Serco Group Plc, a provider of outsourcing services, said it’s not in talks over any “major transaction” after a newspaper reported the company had offered $2 billion to buy SRA International Inc.

Serco Group, based in Hook, England, “is not in any discussions regarding any major transaction at this time,” it said an e-mailed statement today.

The Sunday Telegraph said earlier, without citing anyone, that Serco had bid for SRA International in a deal that would make it the biggest foreign provider of services to the U.S. government. The newspaper said Serco, advised by UBS AG, was improving the offer after the initial approach was rejected.

Source: http://www.bloomberg.com/news/2011-01-23/serco-says-it-s-not-discussing-any-major-transaction-correct-.html

Wipro Ltd., India’s third-largest software exporter, replaced the co-heads of the company’s main computer-services business after posting sales that missed analysts’ estimates.

T.K. Kurien will take over as the chief executive officer of the information technology business, Wipro’s largest, from next month after Girish Paranjpe, 52, and Suresh Vaswani, 51, resigned as joint CEOs, the company said in a statement today. Billionaire Azim Premji remains chairman and managing director.

Premji promoted Paranjpe and Vaswani less than three years ago to lead Wipro through the global financial crisis. Their resignation may hurt client relationships and “disturb” Wipro’s growth momentum, said Rahul Jain, an analyst with Dolat Capital Market Ltd. in Mumbai.

“Both the CEOs quitting is a bit of a negative surprise for Wipro,” said Sandeep Muthangi, an analyst at India Infoline Ltd. in Mumbai. “Senior-management attrition has been fairly high at Wipro, and this could be a precursor for another round of high-level attrition. It also seems very abrupt to me.”

Third-quarter revenue increased 12 percent to 78.3 billion rupees ($1.7 billion), the Bangalore-based company reported today, missing the 80.5 billion rupee average of 47 analyst estimates compiled by Bloomberg. Profit rose 10 percent to 13.2 billion rupees, in line with estimates.

Shares Fall

Wipro slumped as much as 4.4 percent, the biggest intraday drop since Nov. 19, to 456.55 rupees as the company joined Infosys Technologies Ltd. in indicating that a weaker global economic recovery may undermine growth in India’s software- services market.

The stock changed hands at 460.50 rupees, or down 3.6 percent, at 10:53 a.m. in Mumbai.

Vaswani worked at Wipro for more than 25 years, serving at different times as chief executive officer of Wipro’s joint venture with Acer Inc. and president of Wipro Infotech.

Paranjpe joined Wipro more than 20 years ago. He and Vaswani were promoted to joint CEOs of Wipro’s IT business in 2008. The two are also resigning from their positions on the company’s board of directors.

“It hurts the company,” said Jain, an analyst with Dolat in Mumbai. “What’s important is who replaces them. The immediate momentum has been disturbed.”

Wipro engaged two CEOs for the IT business to get “diversity in thinking” during the “uncertain environment” in 2008, Chief Financial Officer Suresh Senapaty told reporters in Bangalore.

‘New Environment’

“Now if you go into the new environment there’s a unanimous view that there is growth, there is an uptick in IT spend and outsourcing,” he said. “From that point of view, all you need to do is drive growth, and therefore it was thought appropriate by the company that we need to have one CEO.”

The operating profit margin for the main IT division was “flat” in the quarter, Senapaty said. Wipro’s 10 percent growth in third-quarter profit was slower Infosys’s 14 percent increase and market leader Tata Consultancy’s 30 percent.

“Wipro is lacking in terms of growth,” said Jigar Shah, a Mumbai-based analyst at Kim Eng Securities India Pvt. “The company is doing well, but not as well as its peers.”

Source: http://www.bloomberg.com/news/2011-01-21/wipro-third-quarter-profit-increases-10-sales-miss-analysts-estimates.html

Carlsberg has signed a five-year contract with Accenture for application services for its European brewery operations.

Accenture will support a range of application services in a co-sourcing agreement managed by Carlsberg. The services will support the brewer's business standardisation programme.

Application services will be delivered in areas such as incident management and problem management. Accenture will support service validation, test management and request fulfillment.

The supplier was chosen based on its experience in delivering similar services in the consumer products industry, said Kenneth Egelund Schmidt, vice-president and CIO at Carlsberg.

In April 2009, Carlsberg signed a contract with Accenture for SAP and Microsoft software implementations in Europe, and the delivery of a common enterprise resource planning platform.

HP Enterprise Services today announced FCC, a Spain-based multinational public services company, has signed a seven-year technology services agreement with Hewlett-Packard Servicios España, S.L.

The agreement is intended to transform FCC’s technology infrastructure to advance the company’s ability to compete internationally; it is valued in excess of $300 million in revenue for HP.

With this agreement, HP will provide data center services and end-user workplace management for the entire FCC organization, which has a presence in 54 countries. FCC’s core businesses are environmental services and water management, construction of large infrastructure, cement production and renewable energy production.

“FCC has grown twofold over the last four years, and we want to increase our competitiveness on an international scale by improving our efficiency and practices,” said Antonio Gómez Ciria, general manager, Administration and IT, FCC. “HP’s innovative, industry-leading infrastructure services will ensure our IT systems meet our critical business requirements as we expand into additional global markets.”

The agreement is part of a broader initiative by FCC to reengineer its management systems to better allocate resources to strategic tasks. Citizen Services Group, FCC’s parent company, intends to apply these same efficiency improvements to all of its international businesses.

HP will provide centralized data center services and consolidate FCC’s distributed data centers into two locations in Madrid, Spain, operated by HP. Through consolidation and standardization, FCC can increase agility, improve visibility over its international operations and lower its operating costs.

HP also will provide workplace services, including delivering service desk services in nine languages to support FCC’s 20,000 worldwide employees. Onsite support and managed print services will keep systems running and users productive. HP’s workplace solutions are based on industry best practices that create consistent, well-integrated and scalable processes and tools to deliver a more agile end-user computing environment.

“To capitalize on its many growth opportunities, FCC needs a technology infrastructure that is available, enables collaboration and adapts easily to change,” said Mike Nefkens, senior vice president and general manager, HP Enterprise Services, EMEA. “Drawing on our extensive expertise in managing technology environments for large global companies, the HP team will help FCC on its journey to become an Instant-On Enterprise.”