EDS forms alliance to challenge IBM's Global Services business

EDS on Monday announced the formation of the EDS Agility Alliance with industry heavyweights Cisco, Dell, EMC, Microsoft, Sun Microsystems, and Xerox. The partnership will be the foundation for EDS' efforts to regain momentum in the services business, where it has lost ground to challengers such as IBM's Global Services unit.

"The EDS Agility Alliance changes the game in the services industry," said Mike Jordan, EDS Chairman and CEO in a release. "Creation of this alliance is a key element of EDS’ multiyear plan to regain market leadership. This alliance goes much deeper than joint contract pursuits.  It extends from the research bench through the life of the business relationship with our clients," he said.

The alliance will work on developing, selling, and supporting EDS' Agile Enterprise Platform, which will be the company's global delivery system for future outsourcing contracts.   Members of the alliance are currently developing the core components of the platform, including the global secure network, workplace services, hosting, and storage. According to Robb Rasmussen, vice president of global alliances for EDS, Cisco and EDS are working together on building out the global secure network.

"We're leveraging the strengths of all our partners," Rasmussen said. For example, EMC and EDS are collaborating on information storage and management solutions, while Sun and EDS are jointly creating hosting components to lower total cost of ownership through virtualization technology and utility computing technology.

Rasmussen said the alliance marks a change in philosophy for EDS, which has in the past been agnostic in terms of technology.

"Currently, we work with about 2,400 different software partners. What we are saying here is that we do have a technological bias and that we have an acute focus on solving our customers' problems," he said.

The partners are also committed to the alliance, he said. "Some partners have overlapping products, yet they've put that aside in order to better serve the customer," said Rasmussen. The reason for this altruism is not a sudden act of benevolence, however. "Our partners have lost business to IBM's service group as well," he said.

To accelerate the development and delivery of the Agile Enterprise Platform, EDS is building out the initial joint development center at its Plano, Texas headquarters. That center will then be replicated in other global locations.

EDS will add application, business process, and industry-specific alliance members in the coming months, Rasmussen said. "We're not through by a long shot. This is just the beginning," he said.

While IBM and Perot Systems r ecently lost some large outsourcing deals when companies did not renew contracts, the outsourcing business remains strong. According to a recently report from TowerGroup, outsourced IT spending will increase to $49.3 billion in 2008, up from $28 billion this year.