CIO - Xerox's $6.4 billion bid for business process outsourcer Affiliated Computer Services (ACS) is the second merger announced between an enterprise hardware maker and a technology services provider in a week. Just seven days earlier, Dell went public with its plans to purchase Perot Systems.
The Xerox-ACS deal appears to conclude a troubled chapter in ACS's history: The company had been unofficially on the block for several years, during which time it saw a few failed buy-out attempts. It should also mark an end to the pair-ups between computer makers and services providers, now that HP, Dell and IBM are all in the outsourcing business. But other tech equipment makers, such as Cisco or EMC, may be eyeing IT service providers for their recurring revenue sources, says AMR Research Director Phil Fersht. He thinks telecom network providers like Verizon or AT&T may also see some value in snapping up IT services business.
Even more likely-and more imminent-are match-ups within the IT outsourcing space. The ongoing industry consolidation is putting the squeeze on mid-size IT service providers. "They either need to get bigger," says Gartner Research Vice President Dane Anderson, "or they need to become even more specialized."
Continue reading the complete article on CIO.com
Free Insider GuideCopyright © 1994 - 2012 Computerworld Inc. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Computerworld Inc. is prohibited. Computerworld and Computerworld.com and the respective logos are trademarks of International Data Group Inc.
