Expect prices to increase
"Now that Hewlett Packard has completed its acquisition of EDS there are many more questions that arise, such as how this will impact the outsourcing industry.
Prior to the acquisition, it was unclear who made up the tier-one outsourcing list with IBM having a large lead in market share. Now, HP/EDS shifts the commercial dynamic, narrowing the playing field to two tier-one mega outsourcing providers. This new combination of tier-one providers leaves all the other providers racing for their share of market definition and a share of the biggest of outsourcing contracts. Look for more information on relative market share posted here ( http://www.alsbridge.com/news-events/images/hp_eds_2008.pdf).
Moving forward, core questions include: will the new tier-one players change the price points for buyers? Who will be the next player to be acquired? And, will it have a positive impact on price and choices for executives going through the process of considering outsourcing? Good or bad? Time will tell.
I do believe that it is possible to see an increase in prices. This will mean every company should be reviewing their options and be ready for this new tier-one structure in technology outsourcing contracts.
This change is refreshing to an otherwise mature industry. The change in the competitive landscape will be good for the industry in the long run. However, in the short term, I believe buyers need to think through the full impact on the competitive vendor landscape. The choices are clearly not the same for buyers as it will be for the providers. The old rules of thumb on outsourcing are now headed in new directions."
For more information or to schedule an interview, contact Jo Trizila at 214-232-0078.
To read more about Trowbridge and the HP/EDS deal, please read Will EDS's
tough boss fit in?
(http://www.alsbridge.com/news-events/archives/wsj_05_14_08.html)
and EDS: Can-do from the get-go
(http://www.alsbridge.com/news-events/archives/eds_05_18_08.html).
About Ben Trowbridge, CEO, Alsbridge, Inc.
Best known as a thought leader in the evolution of outsourcing, Ben Trowbridge, offers more than 20 years of diversified global expertise in hundreds of outsourcing, shared services and offshore transactions as a consultant and buyer executive. His experience includes leading the strategy and business case development process for senior executives in a variety of industries. Additionally, he led the business case development for restructuring the SG&A costs for seven major private equity transactions valued at over $13 billion. Prior to forming Alsbridge, Trowbridge served as managing partner for Ernst & Young's Outsourcing Services Business and COO for their Global Outsourcing Business.
About Alsbridge, Inc.
Alsbridge, Inc. is an award winning global advisory firm, providing unbiased advice and assistance on outsourcing, shared services and benchmarking. Alsbridge consultants bring extensive vertical industry expertise and a practical knowledge of all areas within information technology and business process outsourcing. Alsbridge's proven methodology incorporates proprietary collaborative sessions, bringing together executive teams from both the client and the provider in an environment that fosters success. Alsbridge supports its recommendations and assistance through significant investments in proprietary benchmarking and ongoing research within the industry. For more information, visit http://www.alsbridge.com.
Contact: Jo Trizila
Trizila Communications
Office: (972) 247-1369
Non Published Cell: (214) 232-0078
jotrizila@trizilacommunications.com
Web site: http://www.alsbridge.com/
