System Integrators beware! — Novell cuts a $135 Million ERP deal with Dallas based ACS!
By Tarry Singh at 30 May, 2009, 4:09 am
System Integrators will have to really wake up and start moving fast and start engaging in dramatic cuttings. While this shouldn’t scare SIs generally with the volume of deals being cut annually. I have access to outsource deals databases worth $ 1/2 Trillion and this may not be really a killer in terms of market hogwash.
What more scary is that SI space will be plagued with all sorts of hardware and software vendors, a term which is quickly becoming inseperable as organic and inorganic mergers and acquisition is leaving everyone confused while sofware vendors like Novell are cutting outsourcing deals with customers!!!
Under a $135m, five-year outsourcing contract, ACS will take over part of the Provo data center operations and will also provide consulting, application development, integration and maintenance services for Novell’s SAP ERP suite. The other part of the deal will see ACS buy $30m of Novell products over the first three years of the deal to upgrade its own data centers.
As part of the outsourcing contract, 156 employees in Novell’s Information Services and Technology group will start getting their paychecks from ACS instead of Novell, dropping its global employee count to 3,745. Basically, the outsourcing deal has allowed Novell to shed four per cent of its workforce.
Expect same sort of deals from other software vendors who will put their engineers, who want a slower life but are still smarter folks, to the customer sites. This helps customers acquire great engineering talent and helps software firms kill the SI space and go for such mega-big daddy deals.
I have been telling folks that for quite a long time now:
- 2 more quarters and we will be in an IT world where massive contraction would have taken plan.
- Great news is for smarter folks, who are doing a whole lot of soul-searching, to build new companies.
- SIs really will have a big problem at hand by Q2 2010 unless they quickly adopt technology trends such as Virtualization and Cloud Computing and rush to the markets fast! They will have to dramatically transform their data centers.
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