Chilly winds of change in IT services market

Since the unexpected departure of EDS Asia Pacific VP Phil Pryke this month, the industry rumour mill has been locked in overdrive.

The week began with EDS vehemently denying rumours hundreds of employees working on the Commonwealth Bank account were being moved to New Zealand in the New Year. EDS said there are no plans to move the application integration team offshore.

However, the Commonwealth Bank is renegotiating its $5 billion outsourcing contract with EDS with plans to split it with another supplier.

Times have certainly changed since the late 1990s when EDS was a major beneficiary of whole of government outsourcing deals.

It peaked when the North American company inked a $900 million a year outsourcing deal with the South Australian government.

That lucrative deal is now being retendered.

It is fair to say Australia's sunny shores have turned decidedly chilly for the outsourcing giant, although EDS is not alone as the local IT services market undergoes drastic change. Next week Computerworld examines these changes in a special report that identifies the winners and losers in the IT services market.

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