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UK private sector joins public in... Escape from DXC Max
Aviva and Centrica wanted cloud giant love. 1 outsourcer... wasn't ready... to let go
Updated Insurer Aviva and energy supplier Centrica are the latest big customers to indicate plans to ditch outsourcing giant DXC Technologies, The Register can reveal.
DXC, which is hell-bent on eking out $1bn in cost savings in its fiscal 2017, recently bemoaned contract run-offs after the UK Department for Work and Pensions refused to renew its desktop and hosting agreements, preferring to insource the work instead.
The losses aren't confined to the public sector: Aviva has tendered the hosting but is understood to favour tax-efficient AWS. It is a legacy $1bn 10-year deal won by HP (the EDS side) in 2009 to provide data centres until the end of June 2019.
Sources told us there was a lot of upset in recent times as HPE Enterprise Services (the part of HPE that merged with CSC to form DXC in April) wanted to close the two bit barns in Norwich it inherited when winning the contract. Circa 300-350 people TUPED across (20 are left) under the arrangement.
In an email sent to staff at the end of last week, DXC confirmed the company was "not the selected partner for the future infrastructure and DC migrations contract with Aviva and that they will now start exclusive downstream discussions with one of our competitors (yet to be named)".
DXC has 20 months of the "current infrastructure contract" remaining "where our continued support and execution will be instrumental to a successful transformation but moreover for the exciting propositions that the new DXC portfolio and partnerships offer Aviva in line with their digital strategy".
DXC said the "outstanding services and Client First focus" delivered by the customer facing support teams "every day" would open conversations with Aviva on service integrator and management, security, information lifecycle management and application, development and maintenance.
Winning new business "starts with flawless execution… delighting the client is our number one goal and remains so," the staff memo added. "It is time as a team to start writing a new chapter in our Aviva history - onwards and upwards".
In the case of another customer, Centrica, it seems management there has selected this approach too: the energy provider is not renewing a supplier agreement with DXC. The original seven-year infrastructure outsourcing agreement valued at £250m was signed by HP in 2011.
A source familiar with the bidding process said Aviva's head was turned by a "sexier" cloud contract put together by Microsoft and Indian outsourcer HCL Technologies.
"We missed a trick with them," our DXC insider said. "They basically worked out they could do something better with Microsoft Azure and HCL. They came in with a better proposition and [Centrica's] CIO wanted to do something more cloud-based and sexier."
Our contact did not elaborate further when we asked additional questions.
We asked Centrica about its parting with DXC. A spokeswoman told us "we look at all of our suppliers all of the time - that is what we do. I can't say any more."
The Register asked Aviva to comment. DXC refused to comment.
Aviva has made contact since the publication of our story, a spokesman told us:
“We are currently running a competitive tendering process for a data centre hosting supplier when our existing arrangement with DXC comes to an end in June 2019. We will be able to confirm which partner we have chosen once the process and negotiation, which is still underway, has concluded.” ®