Ericsson signs 5-year IT outsourcing deal with HP

Ericsson Wednesday said in a statement that it has signed a five-year IT outsourcing deal with Hewlett-Packard Co.

The agreement makes good on a memorandum of understanding the two companies signed in April.

Under the terms of the contract, HP will take over responsibility for Ericsson's IT infrastructure in 100 countries, standardize the company's desktop environment and provide data center management and help desk support, according to Juergen Rottler, vice president, HP Services.

Rottler said that beginning next month, 1,000 employees of Ericsson's Global IT Services division, as well as certain assets, will be transferred to HP. The deal is still subject to regulatory approval.

Although the companies are not releasing financial details, Rottler said the contract is the largest outsourcing deal in Sweden's history. Ericsson's headquarters are in Stockholm.

However, Rottler said HP will not take over Ericsson's information systems operations, which include application development, implementation and management.

"Outsourcing of IT operations is part of Ericsson's ongoing changes within the IS/IT area and its overall restructuring program (which is aimed) at radically reducing the operating expenses and cost of sales," said Per-Arne Sandstrom, Ericsson's Deputy CEO, in the statement.

"This is a big win for HP," Rottler said. "It adds to our credibility, and it will add to our bottom line in the first year of the (contract)."

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