The agreement includes a $7.5 million equity investment in Netigy by EDS Ventures, and a $35.4 million expansion of EDS’ existing IT outsourcing contract with Netigy, bringing the total value of the contract to $60 million. The length of the contract was also extended, from 2005 to 2010. EDS Ventures, EDS’ venture capital group, invests in digital economy companies with leading edge technologies aligned with EDS’ corporate strategy and operations.
Under terms of the agreement, the companies will develop complementary offerings that leverage services across EDS’ and Netigy’s entire suite of eBusiness technology solutions, targeting a market for Internet services forecast by IDC to grow to $78.5 billion by 2003. Netigy will also outsource its IT functions to EDS.
Relationships are as strong as the commitments are bold and this is a bold commitment between our companies, said Gary B. Moore, Netigy president and CEO. We have aligned financially, we have aligned as market partners and we are clients to each other.
Moore said Netigy pioneered processes that ensure companies’ applications perform optimally in demanding network environments, and the company’s leadership extends into infrastructure architecture, management and security. He said the alliance agreement will enable EDS to offer its clients an extended set of capabilities by making use of Netigy’s unique strengths. Similarly, he said, EDS’ capabilities will fill a strategic void for many of Netigy’s clients as they expand their eBusiness infrastructure investments.
This alliance is built on a core belief at EDS that one of the ways we bring value to our clients is through the rapid adoption of cutting-edge technology, said Charles Ansley, president, EDS Information Solutions, U.S. In this case, the technology is Netigy’s intellectual property. They have developed an expertise in a fast growing market segment, and this alliance establishes a direct pipeline to this expertise EDS clients can tap into as the need arises.
Additionally, we are pleased to expand the scope of the core IT services EDS will provide Netigy as it grows, said Ansley. The future success of EDS will be based in large part on our ability to provide-on demand the technology infrastructure companies like Netigy need in order to grow, without having to spend large amounts of up front capital.
