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By Mel Duvall
Royal Dutch Shell has awarded a five-year, $4 billion outsourcing contract to three global technology and telecommunications providers.
The deal, announced Monday, will see the company transfer some 3,000 technology staffers over to the winning suppliers, AT&T, T-Systems International, and EDS. Shell, one of the world's largest producers of oil and natural gas, says it expects to gain "substantial business improvements" as a result of the outsourcing agreement as well as gains in productivity and efficiency.
AT&T, whose share of the deal amounts to $1.6 billion, will provide managed network services and telecommunications to Shell in more than 100 countries. Services include wide area and local area networks, voice services (including Internet-based telephony), managed security, and mobility services. Approximately 560 Shell employees will transfer to AT&T of San Antonio, Texas, under the deal.
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T-Systems, a business unit of German-based Deutsche Telekom, has been awarded a hosting and storage contract valued at $1.5 billion. T-Systems will run three Shell data centers in the Netherlands, as well as a data center in the U.S. and one in Malaysia. Those centers host most of Shell's SAP applications and some 7,400 applications servers. Approximately 900 Shell employees will be transferred over to T-Systems.
EDS of Plano, Texas, will manage Shell's end-user computing services in its share of the deal, valued at $1 billion. Those services include desktop management, service desk, on-site services, back-up and disaster recovery, mobile information protection and managed messaging services for 150,000 end users. About 1,500 Shell employees will join EDS.
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In a statement announcing the deals, Shell chief information officer Alan Matula said the outsourcing is part of a strategy to "accelerate Shell's essential IT capability."
"This deal is a major strategic choice for Shell. It allows Shell IT to focus on information technology that drives competitive position in the oil and gas market, whilst suppliers focus on improving essential IT capability," Matula said.
Under the master services agreements, AT&T, T-Systems and EDS will assume their responsibilities starting July 1, 2008.
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