MCN Direct Newswire

Vol. 3 No. 4, 26 January 2004

This issue is sponsored by:

IBM and Cedar Software

This issue news

1. Fujitsu wins final NHS contract
2. Xansa pulls out of North America
3. Atos Origin wins acquisition approval
4. SBS secures $369 million contract in Wales
5. Unisys meets strategic objectives
6. Further information - feedback/forward to a colleague/unsubscribe

Sponsor

IBM

Windows was once the quintessential scale out operating system. It ran on inexpensive, high volume hardware. It was cheaper than the competition, tons of application ran on it and it was common enough that almost every IT shop had Windows skills in house. But the days of Windows being useful only as a departmental file server, or as part of a packaged solution from a reseller, are past. Clients now look to do more with less, consolidating and simplifying where they can. This new paper from IT analyst Illuminata reviews vendor offerings in the fast growing Windows consolidation market. Click here to read more.

1. FUJITSU WINS FINAL NHS CONTRACT

A Fujitsu-led alliance has secured the final contract under the NHS' $9.7bn UK-wide computerisation project. The contract to deliver a care records service to the Southern region is valued at $1.6 billion over 10 years - in line with the value of the four previous 'local service provider' contracts (MCN Direct 2-47, 3-1), but covering the largest region and almost a quarter of England's population.

The selection of the Fujitsu alliance ended EDS' hopes of winning any of the NHS work under the National Programme for IT (NPfIT). EDS was bidding for the Southern region in the PlexusCare alliance with Logica. Also in the running was SchlumbergerSema - which failed to secure any regional participation, but won the $107 million NHS electronic bookings contract with Cerner.

The winning alliance comprises Fujitsu Services with responsibility as lead contractor, IDX Systems providing core clinical applications, Tata Consultancy Services offering clinical applications implementation and data migration - and the only Indian services firm to win work within the NHS programme - PricewaterhouseCoopers providing security and training, and BT handling systems integration.

NHS IT director general Richard Granger said: "We are very pleased to have completed the procurement for the NHS care records service. Five out of the six contracts were awarded before Christmas 2003. It became clear that in the Southern cluster there was still scope for improvement around affordability and terms and conditions to bring the three offers available in line with those secured for the other clusters.

"Our prudent approach in taking a little extra time to award the contract has been vindicated by the value for money position secured with the award of this contract. In all cases, the contracts have been awarded in full compliance with the procurement principles, which were published in January 2003. The programme will now shift its focus to ensuring delivery of high-quality services to a challenging timetable."

2. XANSA PULLS OUT OF NORTH AMERICA

Xansa is quitting North America, its last remaining overseas market after it shut up shop in continental Europe and Asia-Pacific at the end of last year (MDN Direct 2-35, 2-46).

Xansa said it was "exploring all options" concerning North America when it released its interim results in December but now says "withdrawal will represent the optimum outcome".

The company has 140 staff in North America - out of a total of 5,500 in the UK and India - and expects the closure to cost between $5 million and $9 million by the time it is complete in May. Xansa will take a write-down of $39 million against the move in the second-half of its financial year which ends in April.

The North American business is primarily project driven, based on Xansa's acquisitions of Druid in 2000 and Synergy in 2001. The closure will leave Xansa pursuing its stated strategy of building its "integrated IT and business process outsourcing strengths using its offshore model".

Sponsor

Cedar Software

Cedar Software Ltd is the UK's largest supplier of financial management, eProcurement & business intelligence solutions.

Because CedAr is in business to be successful, alliances are an important part of our business model. With CedAr, customers get the best financial accounting software and the support of a powerful ecosystem of partners.

To find out how partnering with CedAr can help you to enhance your services please contact Steven Budge on 01932 584175 or mailto:steven.budge@cedar.com, alternatively click here.

3. ATOS ORIGIN WINS ACQUISITION APPROVAL

Atos Origin has won shareholder approval for its acquisition of SchlumbergerSema, but despite plans to accelerate merger integration plans, the company expects no significant revenue improvement during 2004. The acquisition is due to be completed at the end of this week.

Both Atos Origin and SchlumbergerSema released 2003 results as they prepared to sign the acquisition contract.

Preliminary results from Atos Origin show a 0.4% drop in full-year revenue to $3.8 billion. Pre-tax profits were $315.3 million and the operating margin was 8.2%.

Consulting revenues rose 108% to $461.8 million on the strength of a full-year revenue contribution from Atos KPMG Consulting - without Atos KPMG Consulting, organic revenue fell 21%. Systems integration dropped 12% to $1.4 billion, while managed operations were down 3% at $2 billion.

The activities of SchlumbergerSema that are being acquired by Atos Origin reported 2003 revenues up 11% at $2.7 billion. Pre-tax profit increased from $17 million in 2002 to $61 million as the result of cost reduction programmes, and the operating margin for the year was 3.1%, supported by a rise to 4.7% in the final quarter.

Atos Origin will pay $507.5 million in cash for SchlumbergerSema as well as 19.3 million common shares, giving SchlumbergerSema an initial 29% share in the merged company, with a view to decreasing ownership to 19% once the deal is sealed.

4. SBS SECURES $369 MILLION CONTRACT IN WALES

Siemens Business Services (SBS) has won a $369 million, 10-year contract to build and operate an upgraded IT infrastructure for the National Assembly for Wales.

An SBS-led alliance beat IBM and EDS to the deal. SBS has been working for the National Assembly for Wales since 1996 when it won the forerunner to this contract to design, build and operate an office automation system.

The contract comprises a business change programme, as well as planning and installing a new IT infrastructure, including a videoconferencing system that can support future requirements for electronic polls and voting.

SBS will manage the project and install the technologies underpinning the business change. Alliance member PA Consulting will lead the business design and change programme, Cap Gemini Ernst & Young will supply application development, and Siemens Information & Communications Networks will deliver telecoms and videoconferencing services.

* Siemens Business Services has reported first-quarter 2004 profits of $56 million, up from $15 million a year ago. The improvement was primarily due to cost reductions. First-quarter sales were down 4% year-on-year to $1.5 billion, with orders unchanged at $1.8 billion. The company said: "Market conditions for SBS remained weak, particularly in western Europe, and the group continues to adjust its staffing requirements accordingly."

5. UNISYS MEETS STRATEGIC OBJECTIVES

Unisys closed 2003 having achieved all its strategic objectives - including double-digit growth in its business process outsourcing and enterprise security operations, and an improvement in its operating margin on services sales.

Unisys made revenues of $4.7 billion from services and $1.2 billion from technology last year. Its services business - which generated 80% of 2003 revenues - achieved a final-quarter operating margin of 7.2% and ended the year with a $9 billion backlog.

In total, Unisys reported full-year net profit up 16% at $258.7 million, on revenue rising 5% to $5.9 billion.

Unisys chairman and CEO Lawrence Weinbach said: "This was a very good year for Unisys, delivering consistent results in a volatile industry environment. We look for continued strong progress in 2004 as the market continues to improve."

Weinbach noted five strategic objectives for 2004 that broadly reflect the company's activities in 2003: continuing double-digit growth in annuity-based outsourcing; growth in the services operating margin; accelerating growth in enterprise security; double-digit growth in ES7000 server sales; and enhancing brand awareness of Unisys.

6. FURTHER INFORMATION - FEEDBACK/FORWARD TO A COLLEAGUE/UNSUBSCRIBE

• For more information or if you have any feedback on MCN Direct, please email editor@pmp.co.uk
• To unsubscribe from MCN Direct, simply send a reply to mcndirect@pmp.co.uk. In the BODY of the message please type MCN DIRECT UNSUBSCRIBE

Please visit http://www.pmp.co.uk to view any of these publications, all of which are fully searchable and represent thousands of pages of information relevant to the consultant community.

Publications include:

Management Consultants' News

Consultants' Advisory

International Consultants' Guide

International Consultants' News

Copyright 2010 PMP (UK) Ltd.