Origin BV, the Eindhoven, Netherlands-based IT services arm of Dutch electronics giant Philips Electronics NV, has captured its biggest ever non-captive outsourcing deal with Dutch life sciences firm Akzo Nobel NV. The seven and a half year agreement, which could be worth as much as 1bn euros ($1.1bn) over the contract lifecycle according to a top Origin executive, will go some way to removing industry doubts over the company’s ability to win the largest of services deals.
The contract, which started on July 1, 1999, will eventually see Origin take responsibility for most of Akzo Nobel’s IT infrastructure worldwide, said executive VP sales and account management, Peter Overakker. For now Origin’s efforts will concentrate on Akzo Nobel’s operations in the Netherlands, the USA, Germany, Belgium and Singapore. This will gradually be widened to include Argentina, France, the UK and Spain.
The deal follows an understanding between the two companies, signed in March, 1999, for Origin to absorb Akzo Nobel’s IT operations unit, Akzo Nobel Information Services (AIS), including its 700 employees in Europe, North America, and Asia/Pacific. This has also now been ratified. Origin will replace Cap Gemini as a supplier of SAP contractors to Akzo Nobel.
The announcement comes at a time of considerable expansion for Origin. CEO Robert Pickering has said the company is on the verge of two or three further global outsourcing deals in the consumer electronics and energy sectors. Origin also seems set to benefit from Philips’ 3.5bn euro ($3.6bn) cash pool, which it earmarked for strengthening existing operations yesterday.
