News Briefs

Gateway Cancels Outsourcing Deal

Gateway Inc. plans to terminate an IT and business process outsourcing contract that it signed last September with Affiliated Computer Services Inc. Dallas-based ACS said the seven-year, $400 million deal will be dissolved within 90 days. Recent layoffs and store closings have "dramatically reduced" Poway, Calif.-based Gateway's need for outsourcing services, ACS said.

Utility Hands Off IT, Business Units

TXU Corp., a Dallas-based utility and energy services company, said it has signed a 10-year outsourcing agreement valued at $3.5 billion with Paris-based Capgemini. The two are forming a company that will provide IT services to TXU and run business operations such as human resources and finance. TXU will own about 3% of the new company.

HP Says Revenue Rose 12% in Q2

Hewlett-Packard Co. said revenue in its second quarter increased 12% year over year. The quarter, which ended April 30, was the first in which HP's revenue topped $20 billion. But CEO Carly Fiorina said she still expects only a minimal increase in IT budgets at U.S. companies this year.

Short Takes

Three months after scrapping a plan to bundle its Commerce Server with two other products, Microsoft Corp. said it plans to upgrade the e-commerce software in early 2006. ... IBM said it has signed a 10-year IT outsourcing deal valued at $454 million (U.S.) with Australian airline Qantas Airways Ltd.

Copyright © 2004 IDG Communications, Inc.

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