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KUALA LUMPUR: Malaysia is poised to reap significant benefits with the impending entry of AT&T and T-Systems into Cyberjaya and another company, EDS, expected to expand its presence there, following the signing of multi-billion ringgit outsourcing contracts between Royal Dutch Shell and the three global IT services providers.
Shell yesterday announced it had signed master service agreements with the three global IT and telecommunications suppliers to manage a significant part of its IT infrastructure and telecommunications services. The five-year deals with AT&T, T-Systems and EDS are worth US$1.6 billion (RM5.12 billion), €1 billion (RM4.9 billion) and US$1 billion, respectively.
Apart from Malaysia, Shell’s other three IT delivery hubs are in the Netherlands, the United Kingdom, and the United States.
Shell will outsource the provision of its IT infrastructure and telecommunications services in three service bundles, starting July 1, 2008 — AT&T for network and telecommunications, EDS for end user computing services including desktop, back-up and disaster recovery, and T-Systems for hosting and storage.
Shell said in Malaysia, the agreement between Shell IT International Sdn Bhd (SITI) in Cyberjaya and AT&T, EDS and T-Systems enabled a transfer of 1,000 staff and 400 contractors to the three companies. T-Systems is Deutsche Telekom’s enterprise customer unit.
Shell Global IT Infrastructure & Services vice president Goh Swee Chen said: “The outsourcing programme is part of the initiative to reshape how IT in Shell delivers infrastructure services within Shell, allowing it to focus on the businesses while utilising the capabilities available in the market for service delivery.”
“This agreement sees SITI Cyberjaya evolve from a service delivery centre to a strategic global IT hub providing solutions and differentiated technology to support Shell businesses achieve top quartile performance.” she added.
Shell said the agreement bodes well for the growth of Cyberjaya, which is the global hub of the Multimedia Super Corridor (MSC) in Malaysia. AT&T and T-Systems are new to the township, while EDS already has a presence.
In a separate statement, T-Systems said it would make Malaysia a centre for service management and turn the local data centre into its operational hub for the Asia Pacific region after securing the Shell contract worth RM4.9 billion.
T-Systems, which was awarded MSC status in January 2008, said the agreement, as one of the largest commercial contracts signed to date, would deliver significant cost savings for Shell over five years.
Thomas Jakob, CEO of T-Systems Singapore and Malaysia, said: “We are unequivocally committed to establishing ourselves in Malaysia and reaching out to the Asia Pacific region with world-class ICT services to meet the global requirements of multinational customers.”
Under the initial five-year agreement, T-Systems will take over the infrastructure and IT professionals of Shell’s global data centres, including three centres in the Netherlands and one each in the US and Malaysia.
Reinhard Clemens, a member of Deutsche Telekom’s board of management and TSystems’ chief executive officer, said: “Shell told us, that they wanted agility and innovation. We see their complex environment of over 7,400 application servers as an exciting challenge to demonstrate flexibility in serving Shell in over 100 countries. This is true global delivery.”
In a statement, executive vice president for EDS Asia Pacific and Global Financial Services Industry, Michael Coomer, said with the agreement, EDS Malaysia was poised to be a centre of excellence in desktop engineering.
He said the deal would drive the expansion of EDS Malaysia’s development capabilities and support the creation of a higher-value skill base in the market which further promotes Malaysia as an information technology growth hub. EDS Malaysia will almost double its workforce after completion of this deal to close to 2,000 staff.
“Southeast Asia is experiencing rapid growth as a region of choice in providing global solutions and services. EDS is committed to investing and strengthening our capabilities in the region in support of our clients,” said Coomer. About 1,500 IT professionals, including Shell’s full-time employees and contractors currently working for Shell, will join EDS, in 65 countries globally.
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