Monday, August 20, 2007

Reuters In $1 Billion Outsourcing Deal With Fujitsu

News agency Reuters said Friday that it is outsourcing its internal computing operations to Fujitsu Services under a deal worth almost $1 billion.

Under the ten-year agreement, Fujitsu will provide a range of IT services to Reuters locations worldwide in more than 100 countries. Reuters said an unspecified number of its tech support workers will transfer to Fujitsu to help the Japanese outsourcer fulfill the deal.

The $993 million contract will allow Reuters to "accelerate the development of our internal IT services, giving us greater flexibility to respond to the changing needs of our business divisions," said Reuters CIO David Lister, in a statement.

Fujitsu Services chief executive David Courtley, also in a statement, said the pact will "help enable a step-change in Reuters productivity and hence competitiveness."

The contract calls for Fujitsu to create a standardized, globally consistent IT environment for Reuters. Fujitsu's multi-lingual service desks in Lisbon and Kuala Lumpur will support the effort.

In a research note, analysts at U.K.-based advisory group Ovum said the deal is "significant" and estimated about $200 million of its total value will go toward modernizing Reuters' IT infrastructure -- with remainder to be spent on system support and maintenance. "This is not a simple 'lift-and-shift' deal," said Ovum.

The analysts said Fujitsu's global capabilities helped it win the contract. Reuters did not disclose which other outsourcers were considered for the project.

Reuters has been a pioneer in outsourcing. In 2004 it made news with the announcement that it would outsource a number of financial reporting positions to India.