IT providers get set for contracts bonanza

IT systems and services providers face an abundance of opportunities this year with an estimated $37.5 billion of long-running IT contracts set to expire in the next six months, according to analyst group Ovum.

The group has developed what it calls the "ICT Opportunity Profiler" tool, which forecasts IT and communications spending by type, location, sector and company. It is designed to provide a "360 degree" view of a client or potential client and is sold to IT vendors and service providers.

Ovum said the greatest opportunities will come in the financial services, energy & utilities and communications industries, followed by government and not-for-profit; aerospace & defence and life sciences.

Ovum has submitted iTnews a list of contracts up for renewal:

Telstra featured strongly - with three massive contracts up for renewal in November 2010 totalling over $3 billion in value - replacing a $2.6 billion contract with Alcatel Lucent, and two $733 million contracts with Cisco and Ericsson.

IBM, meanwhile, has two of its largest banking and finance customers in Australia (Westpac and NAB) considering their options in the coming months. By October 2010, Westpac will be moving on from its $2.3 billion IT outsourcing deal with Big Blue, whilst in December the National Australia Bank will put its desktop and infrastructure management business back on the market, which was last signed off at $260 million.

IBM is also the incumbent application and infrastructure management supplier at the Department of Veterans Affairs, which is expected to go to tender in January 2011 with a contract last signed for $71 million. 

Correction - This story originally detailed deals CSC held with AMP, Coles Myer and the Department of Immigration. The information supplied by Ovum has since proved out of date - CSC renewed its deal with AMP in June 2009 (six year deal worth $150m), and claims to also have renewed with the Department of Immigration (for three years). CSC holds no contract with Coles Myer (but did renew a deal with Kmart in March for five years at $36.4m).

Ovum has informed iTnews that this was due to human error (extracting a report based on signed deals rather than upcoming opportunities) rather than a systems error.  Ovum has submitted a new list of opportunities to iTnews. Several of these also appear to be already renewed or signed off. A representative from the analyst group explained that the profiler is only updated on the basis of "publicly announced data".

iTnews apologises for its part in reporting that these deals were new.