Optus swaps out IBM for EDS

Optus has signed an application maintenance and support contract with HP-owned EDS in a deal which sees IBM sideswiped and a bevy of smaller local providers cut off.

EDS won the three-year application maintenance and support deal in a tender that commenced in April 2009.

Some twenty service providers bid for the deal, which the Financial Review claimed to be worth some $150 million.

The EDS contract came at the expense of IBM, which signed an application management services deal with Optus in 2002 expected to be worth up to $500 million over ten years.

IBM and Optus renegotiated that contract for three years starting in 2005. It was set to expire next month.

A spokeswoman for Optus told iTnews that the carrier would "continue to have a relationship with IBM" on some small projects but "not around application support and maintenance."

Optus announced it would also shut its books on up to 14 local software support providers.

"Although application support and maintenance services are already provided to Optus on an outsourced basis, we expect to make substantial savings by rationalising the number of suppliers we work with from over twenty today to five going forward, as a result of these new agreements," Optus CIO Lawrie Turner said in a statement released today.

Optus was unwilling to divulge the names of those companies cast off as part of this "consolidation".

"There are some multinational service providers and smaller software support contracts for specific applications," an Optus spokeswoman said.

The carrier confirmed only that its existing contract with Accenture had been renewed, as had deals with troubled Indian outsourcer Mahindra Satyam and parent company SingTel.

Since 2006, Accenture had been guiding Project Reitz, in which Optus was reportedly spending between $100 million and $160 million overhauling its legacy billing systems.

Optus refused to discuss whether the reviewed application maintenance and support arrangements would see a greater mix of work being done offshore.