Motorola, CSC in $1.6B Outsourcing Pact

By Erin Joyce

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Wireless phone maker and electronics company Motorola has awarded IT services company Computer Sciences a 10-year outsourcing contract that is valued at about $1.6 billion.

The arrangement calls for CSC to manage Motorola's midrange, desktop and distributed computing infrastructure systems at many of its data centers around the globe. In addition, CSC staff are to help manage Motorola's global help-desk network.

As is customary in many outsourcing agreements, CSC has agreed to acquire some of Motorola IT's infrastructure and network assets. Also customary, is the shift of employees to the outsourcing provider. The companies said about 1,300 Motorola employees would join CSC as part of the agreement, which is effective on May 1.

Over half of Motorola's staff that will switch over to CSC are based in the U.S. The rest are based in global offices in Europe, the Middle East, Africa and Asia-Pacific regions. A smaller number are also in Canada and Latin America, the companies said.

Sam Desai, Motorola's senior vice president and chief information officer, said the contract is business-driven, and designed to help the consumer electronics company "drive efficiency and improve financial performance." The deal has built-in goals for improved overall service levels, he said in a statement, as well as improved productivity and quality of services, systems and transactions.

CSC, for its part, is expected to standardized many of Motorola's internal data center processes and integrate its IT infrastructure, as well as improve the company's network security.

The contract is a big win for CSC, whose competitors in the sector include IBM and EDS, and comes on the heels of another client win in the science research sector. This week, CSC said it had been given a $43 million contract extension to continue supporting NASA's Hubble Space Telescope program under an agreement with the Association of Universities for Research in Astronomy Inc. (AURA). The association operates the Space Telescope Science Institute for NASA in Baltimore.

In that agreement, CSC is expected to continue providing systems engineering, software development and maintenance, data processing and computer systems administration.

Tech research firm Gartner estimates that outsourcing will grow at an annual rate of 6 percent over the next two years, despite a slowdown in IT spending by corporations. The market is estimated to reach $696 billion by 2005, Gartner said.