Services giant EDS has won a wide-ranging $2.1bn contract with aircraft engine manufacturer Rolls-Royce in what it claims is one of the largest IT services deals ever made.
The deal extends an existing four-year-old relationship between the two companies to 2012. The focus of the latest agreement will involve business integration and work-share collaboration.
EDS will also develop ebusiness systems and three portals covering supply chain, design collaboration and corporate information. Other services include initiatives for global supply chain, application service offerings and further improvements in IT services.
"We're excited because it brings us new business but also because it goes to show that we provide the level of service expected of us," said an EDS spokesman.
EDS currently provides IT services for Rolls-Royce's operations in the UK and the US. The services house is responsible for Rolls-Royce's IT infrastructure, network, systems and applications, and end-user support.
Separately, EDS also announced an extension of a contract with the Commonwealth Bank of Australia in a deal worth an extra $700m over seven years. The services giant originally won the deal in 1997, which was valued at $3bn over 10 years. The bank chose EDS to manage the technology aspect of its merger with Colonial.
"A key factor in the success of our merger will be the integration of both organisations' systems," said Russell Scrimshaw, head of technology, operations and property for the Commonwealth Bank. "When it comes to this integration, we have confidence in EDS to deliver in the same manner as they have over the last two and a half years."
EDS' latest agreements seem to end a sales drought which had worried investors. In the first quarter of this year the company landed 847 new contracts worth a combined $4.5bn, but none were 'mega deals' which industry pundits say are those worth more than $500m each.
The new contracts with existing customers benefit EDS because the company can now charge more for its services, according to Stephen McClellan, an analyst at investment firm Merrill Lynch. However, investors also want EDS to gain new customers.
"It's a good step in the right direction [but EDS] needs to prove to investors that it can win new outside contracts," said McClellan.
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