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January 11, 2006

IBM and Cisco tipped for GM success

Speculation is mounting over which vendors will be the winners in the most eagerly awaited IT procurement of 2006, automaker General Motors' huge overhaul of its current third-party contracts.

By CBR Staff Writer

Plano, Texas-based EDS Corp, which made some $2bn in its last financial year from its relationship with its former parent company GM, is in the running to lead a new $15bn, five-year award to upgrade and manage the company’s IT and telecommunications infrastructure.

Investment bank Merrill Lynch claims that if EDS is successful in its bid, it will pass on a substantial chunk of the project to networking giant Cisco Systems, including a $40m engagement to upgrade GM’s telephone equipment plus additional revenue from upgrading its network routers and switches.

Cisco is one of EDS’s core partners in its Agility Alliance program, which has seen the IT services vendor build close links with a number of computer equipment and software manufacturers including Dell, Microsoft, and Sun Microsystems in order to build a more rounded technology proposition with which to compete against IBM.

Sun Microsystems announced a major deal with General Motors last August to implement its Java Enterprise System middleware stack running on Solaris as the infrastructure behind its global network.

However, equity analysts at Moors & Cabot believe that EDS will be pipped at the post by arch rival IBM Global Services. GM is also a big IBM server user, using Big Blue’s Unix clusters to simulate crash tests.

EDS’s current contract with GM expires in June and an announcement on the successful bidders for the new awards is expected by then.

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