Technology consulting services provider Computer Sciences is planning to separate its government business from its commercial information technology division.
Word on the street is that an announcement could come next week, when CSC releases its fiscal 2015 earnings on May 19.
CSC has been trying, without much luck, to sell itself. The company has a market capitalisation of close to $9.5 billion.
The company is cost cutting like a mad thing as the US government cut back on its services. However, its government business is seen as attractive to potential buyers because of the high barriers to entry for competitors.
While CSC is still open to acquisitions, it now sees a split in which shareholders would also get stock in a new company as the most attractive and tax-efficient transaction to pursue.
Buyout interest had come from Cap Gemin, HP and Canadian consulting firm CGI as well as the usual sharks from private equity firms. However CSC wanted more money than they wanted to pay.
Hedge fund Jana Partners disclosed a 5.9 percent stake in CSC in February, and said it would continue talks with the company about strategic alternatives and the composition of its board.
IBM has already invested $1.2 billion in cloud services and has now announced it will open two cloud centres in Sydney and Montreal in the next 30 days.
In addition, Big Blue said it will build similar cloud centres in Milan, and in Chennai before the end of 2015 while it will announce further centres later on in the year.
The cloud centres are part of the company’s SoftLayer plans – it already has centres in Frankfurt, in Mexico and in Tokyo.
The idea of the cloud centres is to give its customers options to create public, private or hybrid cloud environments. It has to offer different locations because enterprises have to conform to local regulations about where data resides, as well as providing levels of security.
Jim Comfort, general managed of IBM Cloud Services, said: “With each new location, we’re not only adding more computer capacity… we’re enabling enterprises to move to the cloud at the speed and in a way that makes the most sense for them.”
In a related announcement, IBM said it had extended its partnership with CSC to speed moving their businesses to the cloud. IBM thinks that there will be a 10 fold increase in the number of cloud applications in the next four or five years, meaning the number of developers specialising in the field will triple.
According to research outfit Information Services Group (ISG), the public sector outsourcing market in the UK has taken a massive hit in the first half of the year. The ISG Outsourcing Index for EMEA found just €2 billion of outsourcing activity in the UK for the first half of the year. Last year the market was worth €4.6 billion.
However, Britain still leads the way when it comes to public sector outsourcing in Europe. The whole EMEA market for the first six months of was just €2.3 billion compared to €3.1 billion last year. In other words, the UK accounted for five sixths of all public sector outsourcing in EMEA this year.
The ISG figures track all outsourcing contracts with an annual value of €4 million or more. They include IT contracts, business process outsourcing, back office processes, but IT dominates with more than two thirds of all contracts. Public sector outsourcing now accounts for 41 percent of all outsourcing activity in EMEA, with Britain in a clear lead.
The top 15 companies winning these lucrative contracts are Accenture, AECOM, Arqiva, Arvato, BT, Capgemini, Capita, CSC, Grupo Ferrovial, HP, Interserve, QinetiQ, Serco, Thales and Tieto.