EDS Corp has confirmed that it has terminated its global SAP services alliance with management consultancy PwC Consulting LLC following its $3.5bn acquisition by IBM Corp.
Plano, Texas-based EDS pulled the plug on the deal, which it set up with New York-based PwC Consulting last December to provide systems integration and consulting services around SAP tools to their joint customer base. The partnership brought together a combined total of 10,000 SAP specialists with skills in consulting, systems integration, outsourcing and support services.
The move follows Hewlett-Packard Co, which ended its global alliance with PwC Consulting last month, where the two companies had been jointly working on supply chain and procurement tools and services, as well as IT services to the airline industry since July 2001.
In March 2001, PwC Consulting and EDS extended their alliance to develop biometric verification and risk measurement security tools for the US airline industry. Other firms involved in the airline alliance are Sun Microsystems Inc and Oracle Corp, and according to a report in Dow Jones, EDS said it would continue to work with PwC Consulting in this area.
PwC Consulting's major strength is its own SAP consulting practice, which IDC ranked as the largest in Europe in 2000 ahead of Accenture and IBM GS. In March 2002, research house Gartner Group rated PwC Consulting as a leader in its SAP services, ahead of Deloitte Consulting, Accenture, Cap Gemini Ernst & Young and also IBM GS. Interestingly, IBM GS was ranked below the other global players on its ability to execute, and alongside regional and niche outfits Plaut, Intelligroup and Atos Origin. IBM GS is not used to being pipped at the post by its competitors, and PwC Consulting's market leading position in SAP services will have been a major focus behind the acquisition.
However, the decisions by HP and now EDS come as no surprise since the companies are fourth and second place respectively to IBM Global Services in terms of size, and continuing to work with PwC Consulting would inevitably result in their largest rival winning valuable services dollars right from under their noses.