Compuware Corp’s growing IT services ambitions have received a huge vote of confidence with the announcement of the company’s biggest ever outsourcing contract. The Farmington Hills, Michigan-based company, best known for its applications management and development tools has been selected to outsource the information systems division of The Detroit Medical Center (DMC) in a 10-year agreement worth $1bn.
The contract, which provides for two, two year extensions, will be fulfilled jointly by Compuware and its health care subsidiary CareTech Solutions Ltd in what it claims is among the largest health care outsourcing contracts of its kind. Compuware and CareTech will take over the support and maintenance of DMC’s data center, applications and voice information systems. The contract, which starts with immediate effect, will see Compuware take on all 300 of DMC’s information systems staff.
The extra $100m a year that the DMC deal will generate will go a long way towards helping Compuware achieve its aim of growing its non-product related professional services revenue by 35% to 40% in FY99. Professional services as a whole grew 45.1% in the year to March 31, 1999 accounting for $620.7m or 37.8% of Compuware’s total revenue. About 30% of this figure is currently tied directly to sales of Compuware’s own application development programs, testing tools or systems management software.
