IBM Corp will be 350m pounds poorer over the next ten years with the announcement that it has not been awarded a contract it thought in the bag with British Steel Plc, to take on the facilities management of the whole of the UK steel giant’s information technology systems. In November last year, British Steel announced that subject to the completion of due digiligence, IBM would be awarded the ten-year contract, which involved IBM taking on 600 British Steel staff, and running all of its computer operations, technical support, customer support and help-desk facilities, network managment and associated services and applications systems and support. At that time Computergram warned IBM not to take it all at once! (CI No 3,043), and just as well. British Steel has decided the company once known as Big Blue cannot satisfy our commercial requirements, and will now re-open talks with other information technology groups, including Electronic Data Systems Inc and France’s Cap Gemini SA. British Steel would not be drawn on the precise reasons it has given IBM the elbow, but it indicated that something discovered in the due digiligance procedure had not been satisfactory. The news was naturally greeted warmly by Cap Gemini, which already has a close relationship with British Steel. Last year the French company bought British Steel’s Rotherham-based Central Management Services for 10m pounds, which gave it 325 staff and a five-year, 80m pound facilities management contract for all of the company’s centralized computer services. Cap Gemini says this represents around a third of British Steel’s entire information technology services. In addition, Cap Gemini says it also has a considerable number of individual projects with British Steel, including the recently completed 10m pound migration of the steel company’s joint venture stainless steel business Avesta Sheffield, ironically from an IBM mainframe system to a Digital Equipment Corp Alpha- based client-server system. Cap Gemini says it will be announcing several more projects for various parts of British Steel in the next couple of weeks. Of course the company believes it has all the right experience and expertise to take on the remaining two thirds of British Steel’s computing that IBM has just lost. The contract was due to have started in February, but British Steel confirmed that it is now talking to several other companies. IBM has said only that it and British Steel could not make an overall agreement.
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