NEC, HP team up for global outsourcing services

NEC and Hewlett-Packard (HP) have allied to jointly provide outsourcing services to companies in China, Japan and the US, expanding to South East Asia and Europe in one year.

The companies will establish one or more joint ventures to provide a range of services up to full outsourcing where they take over a customer's IT assets and staff. A joint marketing team to develop and promote these services will be set up in January.

"As a partner, NEC expects HP to jointly provide consistent outsourcing services, from system integration to operation, for the global market," said Koji Nishigaki, president and chief executive officer of NEC, at a news conference, which was also attended by HP chairman and chief executive officer Carly Fiorina, in Tokyo yesterday.

This alliance provides a way for NEC's Tokyo operations to compete with more dominant companies, such as Fujitsu and IBM, particularly in the Japanese outsourcing market.

"Since we don't have any experience in the full-scope style outsourcing business, we hope to learn from HP's business model," Nishigaki said.

HP, on the other hand, is already one of the leading outsourcing companies on its own, especially in the US and Europe. The company was awarded a seven-year, US$1.5 billion contract for the provision of IT services by the Canadian Imperial Bank of Commerce in September. It has also launched large-scale outsourcing services in China.

Fiorina said the two companies complement each other in the outsourcing arena.

"HP focuses on capability, invention and innovation, and NEC brings important capabilities in open mission-critical systems," she said.

The two companies started a product reselling alliance in 1995. This hardware-based alliance was expanded by forming a new system-based alliance in May this year, when they announced they would collaborate to create a new product that includes HP server hardware running NEC's OpenDiosa middleware for running high-availability applications on non-mainframe servers.