Capgemini shifts ownership of network business

Capgemini has announced that it is handing over the reins of a large chunk of its European networking business to telecommunications giant BT.

The move hasn't come out of the blue and demonstrates that in-house networking is no longer deemed as a vital ingredient of service businesses' success, according to analysts.

The company claims that the move, which affects some 250 employees working in its European Networking Infrastructure Services (NIS) division who will transfer to the telco's employment, will expand its reach and enable it to focus on its core business.

BT will ramp up resources by adding some of its own staff to its newly acquired business unit.

The financial terms of the deal have not been disclosed but a BT spokesperson confirmed that it was a significant multi-million pound agreement.

"Infrastructure Management is critical to our clients, and a key part of our service portfolio," said Paul Spence, chief executive of Capgemini's Global Outsourcing Services.

"But we believe world-class networking infrastructure services can be delivered more cost-effectively by BT. This transfer is part of our commitment to deliver innovative solutions to meet the needs of our clients - either through our internal expertise or by leveraging best-in-class expertise of companies like BT."

Capgemini's announcement follows an ongoing industry debate about whether services companies should own the network components of outsourcing deals in their entirety or opt to partner with another player to reduce costs, according to Phil Codling, a senior analyst at Ovum.

"That Capgemini should reach this conclusion is not surprising," he said.

"The company has increasingly positioned itself towards the consulting-led, business-centric end of the IT services market. The network is often an enabling factor in delivering such services, but it's less of a priority than, say, business process expertise or enterprise applications skills."

He added: "The position of the network in IT services strategies is a matter of wide debate. While IT services providers no longer consider actual ownership of network infrastructure to be strategic, some players are increasingly seeing in-house network expertise, supplemented by relationships with network infrastructure providers, as a key to opening up the growing enterprise ICT (i.e. converged network and IT) opportunity."

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