Hertz signs major Euro services deal with BT, HP

The European arm of the Hertz car rental agency has signed a five-year IT and networking services contract with BT and HP.

The European arm of the Hertz car rental agency has signed a five-year IT and networking services contract with British Telecommunications (BT) and Hewlett-Packard (HP), a Hertz Europe executive confirmed. The move will allow the agency to drastically cut the number of its European hardware and communications suppliers.

David Trimm, vice president, business systems at Hertz Europe, wouldn't comment on the financial amount of the deal. However, he described as "speculation" a Forbes.com report that the contract was worth around £50 million (US$91.8 million).

The contract will cover more than 1,100 Hertz rental station sites across the nine European countries where the agency has corporate centers, Trimm said in an interview. The countries are the U.K., France, Germany, Spain, Italy, Belgium, Luxembourg, Switzerland and the Netherlands.

The contract will enable Hertz to consolidate its data communications and IT suppliers across Europe "from 170 to effectively one [BT/HP]" Trimm said. "It makes relationship management a lot easier."

Under the terms of the contract, BT and HP will set up an Internet Protocol-based VPN (virtual private network) based on MPLS (multiprotocol label switching) technology to connect Hertz Europe's corporate headquarters in the U.K. with its larger rental station sites across the Continent. In addition, DSL (Digital Subscriber Line) networks will connect smaller rental sites into the MPLS backbone so they can also link up with headquarters.

HP and BT will also support Hertz's 5,000-plus PCs, 3,000 printers and 148 servers. The two companies will manage voice services coming into Hertz's central reservations center and provide a centrally managed e-procurement system.

"We'll have the ability to coordinate better and increase the availability of our services through having standard desktops and a modern network," Trimm said. The contract will also ensure a standardized service level across Hertz's European operations, he added.

Hertz expects to realize significant cost savings from the move Trimm said, but he declined to quantify the likely amount. He did say that no Hertz employees will be joining either BT or HP and that Hertz doesn't expect to lay off any of its staff in relation to the deal

Hertz is in the process of moving its U.K. corporate headquarters to Uxbridge, according to Trimm. While both BT and HP have been key helpers in facilitating the move, the move itself was "incidental to the contract," he said.

As to the likelihood of extending the contract elsewhere in Europe, Trimm said, "That has yet to be decided. We hope to do so." Hertz is not considering expanding the tie-up with BT and HP to its operations outside of Europe, he added.

In May 2004, BT and HP changed their previous supplier relationship into an alliance centered around the growing convergence of IT and communications. The pair signed a US$1.5 billion, seven-year managed services deal whereby HP would manage BT's midrange and desktop IT infrastructure in the U.K., while the U.K. telecom would manage HP's voice and data network and product support call centers in EMEA (Europe, Middle East and Africa). At that time, BT and HP announced they would create a common services delivery model to go after joint-services contracts with European enterprises.

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