MCN Direct Newswire

Vol. 3 No. 15, 19 April 2004

This issue is sponsored by:

SurfControl, Staffware PLC and Annual Consultants' Forum - 27 April 2004

This issue news

1. IBM's modest growth dampens spirits
2. Capgemini emerges as a collaborator
3. Accenture names new chief
4. Xansa builds government business
5. IBM strengthens services through acquisitions
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. IBM's MODEST GROWTH DAMPENS SPIRITS

IBM, bellwether of the IT services market, has reported a modest gain in its first-quarter financials, dispelling hopes of pent-up demand waiting to be unleashed.

IBM Global Services achieved a 9% increase in revenues to $11.1 billion for the first three months of the year, but adjusted for currency fluctuations this advance was knocked back to 1%. The IT services provider signed contracts valued at more than $10 billion in the quarter, ending with an impressive backlog of $120 billion worth of business.

As a whole, IBM reported net profit up 14% to $1.6 billion, on revenue rising 11% (3% at constant currency) to $22.2 billion.

Company chairman and CEO Sam Palmisano said: "Despite the strengthening economic recovery, many of our competitors continue to struggle with the fundamental, changing dynamics of the IT industry. Because we anticipated these changes - in computing and in how enterprises apply technology - we made significant investments and repositioned IBM during the downturn. Those strategic moves are beginning to pay off.

"Behind the results, clients are increasingly turning to IBM to help them become on-demand businesses. This is creating demand for integrated services and high-performance IT infrastructure based on open industry standards - areas where we have chosen to lead."

IBM's revenue rose 6% in the Americas, behind EMEA up 15% and Asia-Pacific up 16%.

2. CAPGEMINI EMERGES AS A COLLABORATOR

Cap Gemini Ernst & Young (CGEY) has rebranded itself as 'Capgemini' and has launched a campaign to promote its vision of a "collaborative business experience".

The rebranding comes four years after Cap Gemini bought Ernst & Young Consulting and fulfils an agreement made at the time with accountancy firm Ernst & Young that it would drop the E&Y part of its name after a four-year period.

Capgemini CEO Paul Hermelin said other names were considered for the consultancy, but it decided to stick with one familiar to customers.

The company's introduction of the collaborative business experience is also based on customer demand. Following a survey of the perceptions of clients, Capgemini concluded they wanted consultants who work in a collaborative rather than dictatorial manner.

"The consultancy industry has been in flux in recent years. It's now clear that client demands are different. Companies that listen to clients and take on board what they say will capitalise on the market. In response to these client needs, we have formalised our unique approach in the collaborative business experience. A collaborative approach is not something that you can teach employees in a day, it's part of a company's DNA," claimed Hermelin.

Capgemini is promoting the collaboration message through a 60 million euros campaign that will encompass TV, print and outdoor advertising throughout the year.

* Capgemini has named Chell Smith as CEO of its North American operations. Smith has been with the company for 14 years and replaces ex-EDS executive John McCain, who led the reorganisation of the company's North American activities and will now become a trouble-shooter working on "other group priorities" and reporting to CEO Paul Hermelin.

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3. ACCENTURE NAMES NEW CHIEF

Accenture has chosen 26-year veteran William Green as its new chief executive officer to replace Joe Forehand when he steps down on 1st September. Forehand will continue as the firm's chairman (MDN Direct 3.14).

Green is currently chief operating officer for client services, working in the office of the CEO with overall responsibility for Accenture's industry-focused global operating groups.

He was selected by the company's 2,300 partners and comes recommended by the Board - which said it reviewed several highly qualified executives during succession planning and made Green its preferred candidate on the basis that he had "the experience and qualifications that best meet the needs of the CEO role".

Describing Green as a "true leader", Forehand said: "His contributions as a member of Accenture's senior management team, his work on our transition from a global partnership to a corporate firm and through our IPO, and his experiences across all of Accenture's businesses give him unique insight into running our company."

Green joined Accenture in 1977 and became a partner in 1986. He has held many executive positions in the company. Before becoming COO for client services, he was chief executive of Accenture's $3 billion communications and high-tech operating group. He has also been country managing director for the US since August 2000 and a member of the Accenture board since its inception in 2001.

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4. XANSA BUILDS GOVERNMENT BUSINESS

Xansa has won a £75 million IT transformation contract at the Office of National Statistics (ONS), adding a further government scalp to existing projects at the Department for Work and Pensions and the Learning and Skills Council.

The ONS - formed in 1996 from the merger of the Central Statistical Office and the Office of Population Censuses and Surveys - is intent on transforming itself into an e-business with an integrated, enterprise-wide information systems architecture.

Xansa will provide the systems to support this modernisation programme, including a content management system for the ONS website, a data repository, a metadata system for easier classification of statistics and statistical tools and standards.

ONS information management director Dayantha Joshua said: "We have identified a partner in Xansa with whom we believe we can build a structured relationship to help us drive key areas of our modernisation forward. Xansa's track record in supporting large transformation programmes is impressive, and its flexibility, responsiveness and pragmatism are key elements in the framework and relationship we are building."

5. IBM STRENGTHENS SERVICES THROUGH ACQUISITIONS

IBM has increased its presence in India's IT services sector through the acquisition of privately-held Daksh e-Services. It has also scooped up the business continuity services unit left behind at Schlumberger after most of SchlumbergerSema was sold to Atos Origin.

Details of the two transactions were not disclosed, but it is believed that IBM paid $160-170 million for Daksh, which employs 6,000 people at call centres across India, providing services such as customer care, telemarketing and transaction processing. Daksh made revenues of over $60 million last year and will be used by IBM as a stepping stone to offer business process outsourcing services from India.

IBM already employs about 9,000 staff in India and recently demonstrated its own strength in the country by winning a $750 million outsourcing contract from Bharti Tele-Ventures (MDN Direct 3.14).

The acquisition of Schlumberger's business continuity unit - which has operations in Europe and the US, and around 750 clients worldwide - puts IBM on a par with specialist business continuity supplier Sungard and other major players such as HP and EDS.

Although the purchase price was not revealed, the business had previously been valued at $200 million and showed fiscal 2003 revenues of $140 million. IBM intends to combine the Schlumberger business with its own business continuity services.

More than 260 Schlumberger employees are expected to transfer to IBM as part of the deal, which will add 10,000 recovery seats configured as financial trading rooms, call centres and workplaces to IBM's base.

Philippe Jarre, vice president of business continuity and resiliency services for IBM EMEA, claimed: "With more than 40 years of experience in the business continuity and disaster recovery industry, IBM offers a one-stop shop for business continuity and recovery services across most multi-vendor platforms."

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