IT services giant EDS Corp has announced a new R&D and sales collaboration with six of its largest vendor partners, in a move that it hopes will “change the game in the services industry.”
Cisco, Dell, EMC, Microsoft, Sun Microsystems, and Xerox, have committed to investing undisclosed sums in jointly developing new IT infrastructure offerings to be implemented by EDS, and will pool together some 400 engineers at a center at EDS’s headquarters in Plano, Texas.
The EDS Agility alliance will focus on developing as-yet-unspecified joint offerings at the network, infrastructure, application, and business process level. EDS said it is lining up consulting partners to help them tackle business process outsourcing space.
Two further centers are planned in Michigan and in the UK, with the combined headcount of engineers eventually rising to 1,000. EDS expects to have its first collaborative offerings available in 2005.
The alliance represents something of an admission by the vendors that they cannot be all things to all people, and need to combine their resources to help ease the technology integration burden on their clients.
Scott McNealy, chairman and CEO at Sun Microsystems, said: EDS and Sun understand that no one provider can independently deliver the durable, innovative and cost compelling solutions demanded by an increasingly competitive market.
Although EDS insisted that the move is not a deliberate attempt to undermine IBM Corp, it is noticeable that IBM is a common enemy for most of the vendors involved in the alliance, particularly EDS, which trails IBM in the IT services space.
EDS said that the seven companies brought together under the alliance collectively generate more than $150 billion in annual revenue and spend $13.6 billion on R&D.
However, EDS would not disclose any joint revenue targets for the alliance, or reveal exactly how much cash each party would invest to fund joint R&D initiatives. Sam Kingston, managing director of EDS’s commercial business, told ComputerWire that the companies are working to a multi-year plan, and will each make a sizable financial input.
The relationships with the six vendor partners are all non-exclusive, and Kingston said EDS would not necessarily lead all future bids for the alliance. He said: It will depend on the nature of the contract. It could be as simple as one partner leading the deal and subcontracting to the other companies. EDS could have either a light or a heavy involvement.
Kingston said the success of the alliance would be partly judged on the innovation that the pool of engineers can drive, although he said the vendors expect to generate several hundred million dollars from collaborative sales efforts over the next few years.