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Capgemini’s Infrastructure Services unit has signed a significantly-sized IT migration deal with insurance firm, Direct Line Group (DLG). Royal Bank of Scotland (RBS) was ordered to sell the insurer (which floated on the stock exchange in October of last year) as a condition of its government bailout in 2008. As part of this process, DLG will be required to move its IT away from RBS Group IT.
The deal with Capgemini will see all of DLG’s applications ‘extracted’ from the existing RBS environment and moved into a Capgemini data centre. The applications will be run on infrastructure that is part owned by DLG and part owned by Capgemini. This process is expected to take two years and will cost DLG £100m in total (note this is the total cost for DLG to migrate away from RBS, not what Capgemini will receive for its services). Once the migration is complete, Capgemini will then manage the infrastructure for a further three years. The total value of the contract has not been disclosed
DLG has not revealed which other suppliers bid for the work, but we understand that Capgemini had to battle it out with IBM in the final stages of the bid process. Capgemini claims it built credibility with the insurer via two existing contracts, which contributed to its being successful. Firstly, a large application services deal (total contract value is not disclosed but we know the service is provided by 200 people working out of Capgemini’s India operation). And secondly, a small “digital transformation” contract.
The deal announced yesterday is the largest won thus far by Capgemini’s Infrastructure Services unit, which was established in 2011. We estimate that Capgemini’s infrastructure services business was worth £670m in 2011, placing it at number five in our most recent supplier ranking (subscribers can see the full ranking here). If you are not yet signed up to the InfrastructureViews research stream, see what you are missing here.