The most recent articles from Computing

Logica cost cuts steady the ship

Tom Young — 2009-11-04T11:31:00.000Z

Tom Young, Computing, Wednesday 4 November 2009 at 11:31:00

Third-quarter revenue at services firm up two per cent on same period last year

Shares in IT services firm Logica rose 1.5 per cent this morning reflecting strong orders, good outsourcing work and cost savings as a result of a restructure.

This was balanced by continued market weakness in consultancy and professional services.

The firm's outsourcing division saw revenue growth of 11 per cent but there was a 12 per cent decline in consulting and professional services.

The share rise follows third-quarter results with revenue at £862m, a two per cent rise on £845m year on year.

The firm saw a continued strong performance in the UK market offsetting a weak result in Benelux.

Logica chief executive Andy Green said: "Logica continued to deliver well in the third quarter with our investments in client-facing activity showing through in good orders in a tough climate."

The firm said it expected full year revenue decline to be around three per cent on the previous year.

The firm continued to lay off staff in the quarter and has moved more employees to flexible working to try to cut costs.

This will bring total headcount reductions to about 2,200 since the beginning of 2008.

Logica expects to have saved £125m by 2010 as a result of this restructuring.

Fujitsu staff vote for industrial action

Tom Young — 2009-11-02T16:54:00.000Z

Tom Young, Computing, Monday 2 November 2009 at 16:54:00

Pension reduction is unnecessary in a profitable company, says union

Union members at IT supplier Fujitsu have voted to take industrial action against the firm after it decided to change its pension plans for employees.

The union Unite says 74 per cent of its members voted for strike action with 92 per cent voting for industrial action of some sort.

Unite's senior representatives in Fujitsu will meet today to determine what action will take place.

Peter Skyte, Unite national officer for IT and communications, said:

"Unite members are asking why they should lose their jobs and tighten their belts when last year the company paid out about £150m to shareholders and around £1.6m to two directors as compensation for loss of office."

Unite says Fujitsu is planning to dismiss employees later this month, and then offer them contracts with the pensions provisions altered, closing them to future accrual.

The union says this will reduce the total pay package of each employee by around 20 per cent.

The company imposed a pay freeze on UK staff earlier this year and in August it announced proposals for 1,200 redundancies in the UK.

Fujitsu employs about 12,500 staff in the UK at sites including Bracknell, Crewe, Sheffield, Warrington and Newcastle.

The union has protested that Fujitsu is a successful company, posting £200m in pre-tax profits last year.

Skyte added: "Fujitsu remains a highly profitable company and our members are insisting that the company must treat them fairly and increase pay, provide decent pensions, and consult meaningfully to minimise job losses and avoid compulsory redundancy."

Intel and SAP fund titanic push into advanced cloud computing

Dave Bailey — 2009-10-28T12:54:00.000Z

Dave Bailey, Computing, Wednesday 28 October 2009 at 12:54:00

Technology firms launch collaborative venture to drive cloud computing platform and services

With cloud computing services likely to mature significantly over the next five years, hardware giant Intel and business software firm SAP have launched a new collaborative venture to examine opportunities in this area.

The launch was announced at Belfast’s Titanic Quarter business and science park last week.

Called a "co-lab", the collaboration is housed in a building yards from the dock that saw the ill-fated Titanic set sail on its maiden voyage.

The collaboration will investigate practical and business aspects of cloud computing such as power saving, virtualisation, and the provision of business services similar to those aimed at consumers by Twitter and Google.

Intel will look at hardware and the cloud

The Intel side of the co-lab will focus on the hardware needed for cloud computing infrastructures, while SAP will look at how to engineer its software to move to a cloud computing platform. However, both companies won't be engineering discrete systems, the solutions they come up with, "will need to be end-to-end customer-focused ones," said SAP global head of research Lutz Heuser

Intel Labs Europe director Martin Curley, who instigated the closer collaboration, said: "After deciding that the co-lab would be a good idea, we outlined a number of hot topics that were of interest to both companies - areas that would benefit both companies if we pooled our resources."

Intel chief technology officer and head of Intel labs Justin Rattner agreed that collaboration was important: "We think of the co-lab as a new way of doing research," he said. "It’s clear that no one company can expect to do all the heavy lifting necessary to move new technology into the market place, and it’s only through such partnerships that we can accelerate innovation."

Rattner said it was important to recognise that consumer cloud services are difficult to conduct research on. To enable this, Intel has created a separate infrastructure.

"This allows research firms to trial computing services in a secure and harmless way. This is an acknowledgment that enterprises need access to a universal test bed," he said.

Rattner also addressed the environmental side of cloud computing.

"It’s no accident that these datacentres have sprung up in areas with cooler climates - it’s a way to avoid using large amounts of power to cool their infrastructures," he said.

Rattner cites Google and Microsoft's datacentres as examples - both are situated on the Columbia river in the US.

"You pass Google’s datacentre and then further north you pass Microsoft’s datacentre. A large river with a high water flow is a very convenient cooling mechanism," he said.

Rattner pointed out that the physical hardware of cloud infrastructures uses only a small part of the energy required - in the order of two per cent.

He said: "So even though we can have a big impact on the amount of power that the electronics is consuming, it turns out there are other factors that were historically beyond our control - we will be examining these in the co-lab."

These factors include an incremental cost per server for distributing power around the datacentre; providing an uninterruptible power supply for electricity supply glitches; and cooling fans for removing heat from the datacentre.

Rattner explained there were ways to minimise these losses with a total systems approach to energy reduction: "This is just one of the areas we’ll be looking at."

SAP to focus on software in the cloud

Heuser said SAP's focus would include " projects that focus on supporting virtualisation technology using SAP applications. It will be important to see how you can manage your datacentre in a different way".

Heuser said the major technology for the next decade would be internet services. He said that although consumer-based services from the likes of Google and Twitter have been successful, these have not arrived yet for enterprises.

"We hope that our joint research with Intel will allow us to deliver such services to enterprises within the next five years," he said.

Heuser said he was looking forward to the internet of the future.

"We will see convergence mature to the the extent that we can put core business services on the web," he said.

Profit rises at Wipro

Angelica Mari — 2009-10-27T12:08:00.000Z

Angelica Mari, Computing, Tuesday 27 October 2009 at 12:08:00

Indian supplier reports positive results and sees improvement in client demand

Indian IT services provider Wipro reported profit growth of 21 per cent and forecast growth for a second consecutive quarter on Tuesday.

Net profit for the firm’s second quarter grew to 11.7bn rupees (£152.5m) from 9.73bn rupees (£126.1m) year on year.

IT services revenue for the firm – which also makes soaps, light bulbs and hydraulic equipment – contributed more than 72 per cent of total revenue, with 37 new service contracts won over the period.

Revenue will range from £664m to £676m this quarter, according to the company, which posted sales of £651m for its IT unit between July and September, compared to its July forecast of £639m.

"We see more stability in volumes and pricing, as well as an improving demand environment," said Azim Premji, Wipro's chairman.

Earlier this month, Wipro’s rivals Tata Consultancy Service and Infosys reported net profit growth of 28.7 per cent and 7.5 respectively for their second fiscal quarters, which may mark a recovery from the global slowdown for Indian IT suppliers.

CA sees profits rise and predicts further growth

Tom Young — 2009-10-23T16:02:00.000Z

Tom Young, Computing, Friday 23 October 2009 at 16:02:00

Revenues down but profits up as company raises expectations for the next six months

IT software and services firm CA reported profits of $232m (£142m) for the second quarter, a six per cent rise on the $219m recorded in the second quarter 2008.

Revenues were $1.07bn (£654m), down 1 per cent from the $1.1bn (£673m) recorded for the same period last year.

Chief executive John Swainson said: “We are seeing some improvement in the economic climate, especially in North America, and a willingness by customers to discuss strategic projects that will help tightly align their IT and the management of their IT resources with business imperatives."

Swainson says he expects revenues to pick up further in the second half of the year.

CA continued to see improvement in its mainframe performance, with significant growth in new product sales and demand for capacity as well as a benefit from customer decisions to rationalise their mainframe software and consolidate on fewer vendors.

During the second quarter, the company signed 18 licence agreements with aggregate values greater than $10m (£6.1m) for a total of $366m (£224m), compared with 17 licence agreements totalling $892m (£546m) in the second quarter of fiscal year 2009.

The firm said it also experienced healthy demand for its business governance, service management, security management and automation offerings.

Global IT industry to regain growth in 2010

Tom Young — 2009-10-20T10:33:00.000Z

Tom Young, Computing, Tuesday 20 October 2009 at 10:33:00

Spending will fall 5.2 per cent in 2009 before rising 3.3 per cent in 2010, says Gartner

Worldwide IT spending is on pace to decline 5.2 per cent in 2009 with enterprise IT spending set to fall 6.9 per cent, according to figures from analyst Gartner.

The analyst expect the IT industry to return to growth in 2010 with spending forecast to total $3.3tn, (£2tn) a 3.3 per cent increase on 2009.

But Peter Sondergaard, senior vice president at Gartner and global head of research warned against too much optimism.

"While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," he said.

"2010 is about balancing the focus on cost, risk, and growth. For more than 50 per cent of CIOs the IT budget will be 0 per cent or less in growth terms. It will only slowly improve in 2011."

The computing hardware market has struggled more than other segments with worldwide hardware spending forecast to total $317bn (£193bn) in 2009, a 16.5 per cent decline on 2008. Spending on hardware is forecast to remain flat in 2010.

Worldwide, telecom spending is on pace to decline 4 per cent in 2009 with revenue of nearly $1.9tn, (£1.16tn) and forecast to grow 3.2 per cent in 2010.

Worldwide IT services spending is expected to total $781bn in 2009, and it is forecast to grow 4.5 per cent in 2010.

Worldwide software spending is forecast to decline 2.1 per cent in 2009, and the segment is projected to grow 4.8 per cent in 2010.

Gartner said there will be a continued trend towards operational expenditure by businesses throughout the year rather than one-off capital sprees, driven by the rise of cloud services.

UBS sells Indian BPO arm to Cognizant

Angelica Mari — 2009-10-16T16:31:00.000Z

Angelica Mari, Computing, Friday 16 October 2009 at 16:31:00

Deal also includes a services contract between the two firms

Swiss financial services giant UBS has agreed to sell its Indian business process outsourcing (BPO) unit to outsourcer Cognizant in a deal that includes a multi-year services contract.

According to reports, the sale of Hyderabad-based UBS India Service Centre, which employs 2,000 employees, is part of a new outsourcing strategy of buying rather than building.

The deal will also see Cognizant providing IT, BPO, knowledge process outsourcing and remote infrastructure management services to UBS worldwide.

"Cognizant's broad banking and financial services expertise as well as its cultural fit with UBS complement the competencies provided by the India Service Centre today, while providing technology capabilities that expand the services we can buy from India to support our cost savings, efficiency and flexibility objectives," said UBS group chief operating officer Ulrich Korner.

The sale is expected to complete by year-end, subject to regulatory clearance. Financial details were not disclosed.

Renault renews Atos Origin contract

Tom Young — 2009-10-15T16:15:00.000Z

Tom Young, Computing, Thursday 15 October 2009 at 16:15:00

Successful running of operations since 2005 leads to further deal

Car manufacturer Renault has awarded a three-year IT services contract to Atos Origin.

The contract covers applications relating to vehicle design, manufacturing, sales and corporate functions.

The deal follows a similar contract between the firms dating back to 2005, which saw a succesful overhaul of IT development.

With the new contract, Renault has extended Atos Origin’s remit to include owner-operator support services, where the supplier will cover 75 per cent of the scope of applications.

Renault CIO François Gitton said: "We will continue this partnership and are counting on Atos Origin to take our IT systems to an even higher level, in our drive for competitive advantage. We will need to be even more proactive and continue to reduce our costs."

Technology Strategy Board to "de-risk" Digital Britain fibre rollout

Dave Bailey — 2009-10-14T16:32:00.000Z

Dave Bailey, Computing, Wednesday 14 October 2009 at 16:32:00

TSB trial will take next-generation internet services into the community to check uptake and prove ROI is possible for ISPs

The Technology Strategy Board (TSB) is to trial applications over next generation optical fibre to test whether consumers and businesses would use the extra bandwidth provided by the technology.

The board is looking to find out whether residential customers would make use of the sort of services that a high bandwidth network would enable.

BT and other ISPs fear that their expensive build out of network infrastructure will be underutilised and fail to generate sufficient revenue to justify the upfront capital costs.

BT has said that the commercial case for a full rollout is questionable, even in areas of high density. However, its recent commitment to deploy a variant of fibre-to-the-home (FTTH), called fibre-to-the-premises (FTTP), gets around the problem.

FTTP would allow BT to offset high infrastructure investment by spreading the costs over a significant number of users – for example residential customers in blocks of flats, or business users situated in the same business park.

TSB electronics and photonics lead technologist Nick Appleyard said: “We are looking to build confidence that new products and services will work over this infrastructure, and you can only really test this by putting the technology in front of real customers."

Appleyard explained that this was not a trial for network hardware, but one that would look at the layer above that – the application and services layer.

"The services we will look at will be aimed at individual and [small] business users. Potentially, they could also be extended into mobile phone-delivered services, too."

Appleyard pointed out that the TSB was not a policy body and could only act within the government's policy remit.

"What we can do, however, is help to encourage private sector investment by demonstrating that the private sector will see a return on investment. We also want to show what that return is likely to be," he said.

Appleyard envisages two or three locations for the service rollouts, which he said will have to be on a big enough scale to get statistically significant data.

"What the TSB will be looking for is a ready-made community that we can upgrade with five years’ worth of internet development," said Appleyard.

The TSB system will be on an "opt-in if you want it – opt-out if you don't basis". Users will get services five years ahead of the game, while ISPs will get an understanding of how their services will work.

"They’ll be able to collect data on what the user groups think of their services," said Appleyard.

As for a start date, Appleyard said: "We'll tender the programme for IT procurement in about a week's time. We need to liaise with the firms who are going to build the IT core of this further down the line. We plan to go live mid 2010."

IBM launches cloud-based productivity suite

Dave Bailey — 2009-10-02T10:25:00.000Z

Dave Bailey, Computing, Friday 2 October 2009 at 10:25:00

LotusLive iNotes lightweight cloud email system jostles with Google Apps

Services giant IBM has launched a competitor to Google Apps, the search giant's cloud-based productivity package.

Called LotusLive iNotes, the service will go live next week in what is a direct challenge to Google, whose service has been the subject of outages over the past year.

The service will cost $36 (£22) per user per year.

One factor in IBM's favour is that it has vastly more experience dealing with businesses than Google. The latter is often perceived as offering consumer-type services with revenue generation mostly through advertisement placement.

Google Apps Premier costs $50 (£33) per user per year, gives users 25GB of storage and a 99.9 per cent uptime guarantee, equivalent to a minute and half per day, 44 minutes per month or nearly nine hours a year in downtime. However, Google recently bit into its service level agreement with two outages in September.

UK firms pitch for CERN business

Tom Young — 2009-09-29T16:11:00.000Z

Tom Young, Computing, Tuesday 29 September 2009 at 16:11:00

Two roadshows this week will give UK companies the chance to work on the Large Hadron Collider and other CERN projects

Seventy six UK firms will meet officials from CERN, the European Organisation for Nuclear Research, this week at two roadshows with a view to pitching for business.

CERN is a large spender on science and technology and runs the Large Hadron Collider, due to be switched on again in November. The organisation spent £110m on supply contracts last year alone.

The UK companies will meet the CERN officials at two roadshows in Oxfordshire and Cheshire on Tuesday and Wednesday organised by the UK Trade & Investment quango.

"Working with CERN is not only a feather in the cap for a British company but also an excellent business opportunity," said UK trade and investment chief executive Sir Andrew Cahn. "Firms which meet the highest scientific standards required by this facility win not only business but also a world-class endorsement of their innovation and quality."

A number of UK firms have already won business at CERN.

Cemgraft Electronics from Berkshire provided half of the 700 ROBin cards in ATLAS, a key part of the Large Hadron Collider.

And eXception EMS, from Calne in Wiltshire, manufactured the tracker front-end drivers for the particle detector CMS, an electronic system designed and developed at the Rutherford Appleton Laboratory in the UK.

"This is a fantastic opportunity for UK businesses to be involved in one of the world’s most exciting scientific projects, and for the UK to reap some of the benefits of the major scientific investment made by the Science & Technology Facilities Council in CERN," said John Womersley, director of science programmes at the Science and Technology Facilities Council.

Can Dell make it as an enterprise IT services firm?

Dave Bailey — 2009-09-25T16:30:00.000Z

Dave Bailey, Computing, Friday 25 September 2009 at 16:30:00

Dell has a long way to go before it can rival HP's and IBM's services offerings

The announcement by Dell earlier this week that it is to acquire IT services firm Perot Systems for $3.9bn (£2.4bn) looks to be the Texas firm's first step on the road to becoming a full-blown IT services company.

Dell said that the takeover would create an IT services firm with $8bn (£5bn) in services revenue.

The motivation for Dell is obvious: hardware margins have been under downward pressure for a decade; virtualisation is enabling organisations to achieve greater server utilisation; and the recession has seen corporate buyers delaying desktop and server refreshes. Compared to hardware manufacture, IT services looks relatively healthy.

In a conference call to announce the acquisition, chief executive Michael Dell said that integrating services into a single offering would significantly expand his company's enterprise solutions capability.

"We'll also be leveraging Perot Systems' enterprise services capabilities across a much larger Dell customer base that spans multinationals and large corporations, government, healthcare, educational institutions, and small and medium businesses," added Dell.

Focusing on IT services rather than hardware manufacturing is something IBM achieved earlier in the decade, after years of internal change, so it is likely to take Dell some time. And then there is the competition Dell will be up against.

Gartner research vice president Dane Anderson said that Dell would be looking to exploit opportunities similar to those HP got when it acquired EDS in May 2008.

"But this acquisition is not on the HP/EDS scale and as such won't guarantee Dell such a grand stage," he said.

It's a view echoed by Clive Longbottom, Quocirca services director for business processes facilitation. Enterprise customers go to Dell because they think they can save a few hundred pounds on each server, he says. "But now those same customers can go to IBM or HP or Fujitsu, and can get servers at the same price, and a choice of services wrapped around the offer."

European customers wanting to benefit from Dell's acquisition could have a long wait.

"Perot is a well-known name, but Dell will have to put in a hell of a lot of money to bring it to Europe, or they’ll have to build it up another way, because you can’t suddenly take Perot and deploy 10,000 people in Europe," said Longbottom.

"If I was a European customer looking at this I’d think there'll be no change in the near future. Remember, Dell can't afford to buy Accenture, CFC or some other big independent that would have brought immediate benefit," added Longbottom.

Gartner's Anderson believes the deal could open new doors for Dell. However, he sounds a note of caution.

"While this gives Dell greater services capability, and specific expertise in several verticals, the reality is, it does not give the company carte blanche to pursue all deals of all sizes in all industries."

Anderson thinks Dell needs to maintain focus on Perot's established niches - healthcare and government - first, then sell modular services to SMEs.

Dell expects the transaction to close in its November-January fiscal quarter, subject to government approvals and other customary conditions.

Virgin Media seeks to unify internal IT and customer offerings

Angelica Mari — 2009-09-24T07:00:00.000Z

Angelica Mari, Computing, Thursday 24 September 2009 at 07:00:00

Chief technology and information officer Martin Wyke talks to Computing about the challenges of his role

For a company whose reputation rests on its technology, getting IT investment and its application to the business right is a critical task for Virgin Media, one of the UK’s largest communications and TV suppliers.

IT is at the centre of the firm’s expansion plans, and the IT department is undergoing a restructuring led by new chief technology and information officer Martin Wyke.

Wyke was headhunted in April into the dual role which combines responsibility for traditional IT leadership with development of technology-enabled product offerings.

“On one hand, I will take advantage of my experience as a CIO for some large organisations, but on the other it will also be a big learning curve to get into cable, television and the whole customer proposition at Virgin Media,” Wyke told Computing.

While the hybrid role is not something that would be applicable to all industry sectors, Wyke says it makes sense at Virgin due to the firm’s reliance on IT.

“The most important dimension I bring to this is the ability to make technology happen and being able to converse with my business colleagues about what type of technology would make their life easier,” he said. “It plays to my strengths to not just play with tech for tech’s sake, but how I can bring it to life in the shape of a customer proposition or even an internal one.”

Part of Wyke’s overflowing agenda is repositioning the company’s sourcing strategy, which has Accenture and Tata Consultancy Services as main suppliers and smaller agreements with IBM and Atos Origin.

Driving investment discipline is also part of the job, as well as rationalising datacentres to support the firm’s growing requirements for a resilient infrastructure.

“The word to use is simplification. A lot of work on integration has already taken place but there is still more to be done,” said Wyke.

“There is no immediate need, but I will be looking into better provisioning, product catalogue information, gaining a single view of the customer and bringing systems together so we are equipped to serve customers irrespective of how they choose to do business with us.”

Virgin Media’s three in-house datacentres host more than 2,000 servers. VMware software is used to virtualise physical machines, and the firm uses IBM AS/400s in addition to equipment from Sun and Cisco.

Internal clouds are used within some areas of the business, and service-oriented architecture has received heavy investment. The company also uses thin-client technology extensively and is a proponent of unified communications.

“Because we are a media organisation, we want to make sure that we have a desktop for our internal employees that supports our business vision,” said Wyke.

Much of the IT strategy is centred around the customer experience and value-added services such as backup and better web-based services.

“We are trying to make Virgin Media easier to do business with, so people can see the majority of their requirements can be met over the web instead of a calling a contact centre,” said Wyke.

Billing systems, provided by Convergys, are another area to be improved, as well as supply chain and workforce management. The firm uses a mix of bespoke and off-the-shelf software and that mix is also under review.

To support the IT plans, the company is looking to recruit as demands are outstripping the expertise available.

“I need more in-depth expertise because I have such a large growth agenda. There is a lot of skills availability in the market right now, but we are being very selective,” said Wyke. “I don’t have any issues with people not showing interest. If we were still NTL:Telewest, that would be different. The culture is a plus, with a sense of empowerment, no hierarchical policy and high demands, but also high rewards.”

IBM White Paper download

Outsourcing in times of crisis:

How external relationships deliver real business benefits

EDS is no more

Bryan Glick — 2009-09-23T13:07:00.000Z

Bryan Glick, Computing, Wednesday 23 September 2009 at 13:07:00

Brand name synonymous with rise of outsourcing is scrapped, becoming HP Enterprise Services

HP has announced it is to scrap the EDS brand name, a year after its £7bn acquisition of the IT services giant.

As a division of HP, the organisation will now be known as HP Enterprise Services, ending a brand that has been synonymous with outsourcing since EDS was founded in 1962.

The announcement states that the change will take place “where permitted by local country law”, and it is not yet clear how soon the change will be effective in the UK. The HP Press Office was unsure of the situation, although the former EDS UK website at www.eds.co.uk now redirects to a UK page for HP Enterprise Services detailing the company’s country credentials.

“I see this as the next chapter in a long and distinguished history of IT services,” said Joe Eazor, senior vice president and general manager of HP Enterprise Services.

“And we want to bring that history with us, shifting to HP the industry knowledge, IT expertise and commitment to delivering operational excellence that always defined EDS. I think the EDS legacy can also enhance the already-powerful HP brand, and take it even further.”

EDS’s European general manager Bill Thomas, a former head of EDS UK, announced earlier this month that he would be leaving the company on 31 October, to be succeeded by Mike Nefkens, who is currently EDS vice president responsible for its dealings with General Motors (GM). EDS was at one time a GM subsidiary.

The outsourcer has seen a turbulent 12 months since the HP takeover, with thousands of staff laid off, and co-ordinated protests from affected employees at offices around Europe.

EDS was renowned for its success in winning major government IT projects, including deals with the Department for Work and Pensions, the Ministry of Defence and the Ministry of Justice – although its has at times also been synonymous with troubled Whitehall IT projects such as tax credits and the Child Support Agency.

Dell to buy Perot Systems for $3.9bn

Dave Bailey — 2009-09-21T14:43:00.000Z

Dave Bailey, Computing, Monday 21 September 2009 at 14:43:00

Dell expands portfolio with IT services acquisition

Dell is to acquire IT services firm Perot Systems in a transaction valued at $3.9bn (£2.4bn), a decision approved yesterday by both firms' boards of directors.

The resulting brand would be able to, "provide a broader range of IT services and solutions, optimising how they’re delivered," said Dell in a statement.

Dell chief executive Michael Dell said the takeover would significantly expand the supplier's capabilities and make Perot Systems’ strengths available to even more customers around the world.

"There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other,” he said.

Perot Systems' chairman of the board Ross Perot Jr. said: "Today’s announcement is the next step in formalising a relationship that has flourished for some time."

Dell said that together the takeover would create an IT services firm with $8bn (£4.9bn) in services revenue.

Dell expects the transaction to close in its November-January fiscal quarter, subject to government approvals and other customary conditions.