Atos Origin has been selected as one of four ‘large’ suppliers, alongside BT, Fujitsu and Logica, to compete for business in the new three-year Scottish Government IT managed services framework agreement. This could be extended by a further year, and has the potential to be worth between £150m and £300m over that time.
There are ten suppliers on lot 2 who will compete for ‘small’ managed IT services work. All four ‘large’ suppliers in lot 1 are there, plus Capita, Dell, Kainos, Maindec Computer Solutions, Prosource.it and Amor Business Technology Solutions (Amor Group). There are some interesting names in here. Amor Group is self-styled as “Scotland’s largest independent business technology solutions company”, with forecast FY11 revenue of £38m and 450 staff across its Glasgow, Aberdeen, Coventry, Edinburgh and Houston offices (see Amor falls in love with DW). Buckinghamshire-based Maindec meanwhile is a small IT services outfit with six offices including one in Glasgow, and Aberdeen-based Prosource.it is a fast-growing independent player that employs 250 people and made £17.5m in its year to July 2010, up 19% on the previous year.
We’re not surprised to see the names in lot 1, and it is good to see some local Scottish players on the lot 2 list. However there are a couple of surprising omissions. Sopra, which bought local Scottish hero Newell & Budge, and recently won a deal at Renfrewshire Council (see here) isn't there. Likewise, Capgemini is absent despite a strong position in the market through the eProcurement Scotland programme, and the Tayside procurement consortium, between Dundee City, Perth and Kinross and Angus councils. We suspect Capita will also be disappointed to find itself in lot 2 after all the efforts it is making to build up a significant IT services operation.
For Atos, Fujitsu, Logica and BT meanwhile the selection will be some welcome good news for their public sector businesses. Atos in particular, had a big disappointment recently on the DWP Work Programme (see SITS providers lose out in DWP Work Programme). As we pointed out earlier this month, Atos is the only one among its peers (including other lot 1 competitor Logica) to post growth since the start of 2011 (see here), and it will be keen to see that continue. This means competition in the framework will be fierce. This of course will be welcome news to the Scottish Government, whose overall intention is to drive down the cost of its IT delivery.