Fujitsu has announced a five-year deal with Balfour Beatty to help the construction firm create a more standardised IT infrastructure. Organisational restructuring (combined with recent growth) has led to the creation of disparate and fragmented IT systems. Balfour Beatty now wants to shift to a central IT function that can provision services out to its various operating companies. Financial details of the contract were not released but we estimate it to be of significant value. We also understand that Savvis and Computacenter were in the running for the deal.
For Balfour Beatty, this is a first generation outsource - which is not something we write about all that often these days. Fujitsu will host and manage the company’s data in a shared storage environment, using a combination of physical and cloud-based virtual data centres. It will also provide desktop services and support for 14,000 users in the UK, across 450 permanent locations and 450 temporary sites. As part of the deal, 67 Balfour Beatty staff members will TUPE over to Fujitsu. We understand that Balfour Beatty was keen to ensure jobs were not lost as a result of the deal. Of note, is that the average tenure of staff that TUPE over to Fujitsu is 7-and-a-half years and that 25% of its current workforce have entered the company by such means.
Fujitsu’s topline has been under pressure, with declines in infrastructure services of -6% in the UK in the last full financial year (although profits for the UK firm as a whole have travelled in the right direction - see Fujitsu UK expands profits). The Balfour Beatty contract is a very nice addition to 2013 revenues. Furthermore, we understand that there are other sizeable deals that have been inked and may well be announced in due course.