HP wins C$2 billion IT outsourcing deal, acquires CIBC joint venture stake

HP wins C$2 billion IT outsourcing deal, acquires CIBC joint venture stake

Hewlett-Packard has won a major IT outsourcing deal with the Canadian Imperial Bank of Commerce. The vendor has also acquired CIBC's interest in the Intria-HP computer services joint venture.

The seven-year agreement is HP's largest-ever outsourcing contract. Under the deal, HP will manage a significant percentage of CIBC's IT infrastructure, from desktop PCs to mission-critical systems and software from multiple vendors, including MVS and NonStop Himalaya systems, Unix, Windows NT and IBM AS/400 midrange servers and networking gear.

HP will also provide related technology procurement, asset management and IT vendor management as well as application support services.

Senior management at HP will be keen to suggest the deal shows that the post merger HP business can now square up to services and outsourcing heavyweights such as IBM Global Services, EDS and CSC. Sceptics would undermine that viewpoint by pointing out that HP's strength currently lies in areas of lower value desktop support, rather than outsourcing of high value core business processes. According to the FT the CIBC contract covers 29,000 desktops and 600 servers, which is approximately 50 per cent of the bank's IT infrastructure.

The outsourcing agreement is expected to come into force on 1 November, at which time HP will also assume full control of Intria-HP. The joint venture was established in 1998 and provides outsourcing services to a number of Fortune 500 customers in North America.

John Hunkin, chairman and chief executive officer, CIBC, describes the sale as the next natural step for both HP and the bank: "It allows CIBC to focus on our core businesses, while continuing to provide HP's superior services to our customers."

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