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HP closes in on $600 million Irish deal

Hewlett-Packard's services unit is in the final stages of landing a seven-year deal with the Bank of Ireland, under which the financial institution would outsource much of its IT operations to the company.

    Hewlett-Packard is in the final stages of negotiating with the Bank of Ireland on an outsourcing deal worth about $600 million.

    The seven-year deal, which would involve the bank transferring about 500 of its technology employees to HP, is the latest in a string of high-profile wins for HP's services unit. Last week, the company announced large deals with Ericsson and Procter & Gamble.

    HP and the Bank of Ireland are currently finalizing the terms of the deal, which HP said Monday will be the largest information technology services arrangement in Ireland to date. HP will be responsible for managing the bank's desktops, servers and mainframes as well as the company's networks and printers. HP Services also will provide some customer support and consulting and integration services.

    "We have now begun exclusive discussions with HP and, subject to successful negotiations and due diligence, will appoint them as the supplier of our IT services for a period of seven years," said Cyril Dunne, group chief information officer at Bank of Ireland.

    The Irish bank is already a big HP customer, having purchased a NonStop system, high-end Alpha systems, ProLiant servers as well as desktops and storage gear from the Palo Alto, Calif.-based company. HP also already provides some professional and customer support services to the bank.

    HP has touted managed services, in which it helps other companies run their technology infrastructure, as its strongest growth opportunity in its services business.

    In an interview, HP Services head Ann Livermore noted that this win, like the deals with P&G and Ericsson, came against archrival IBM.

    "That gives us three big wins," Livermore said.

    Outsourcing deals are also becoming the leading way HP adds new employees. The company has laid off thousands through merger-related cuts and is only hiring selectively, mainly in services and its printer business. However, in deals like the Bank of Ireland one, HP often takes on hundreds or even thousands of new employees. With P&G, for example, HP is adding 1,850 workers to its payroll. An undisclosed number of Ericsson workers will join HP as part of that deal.

    "The largest percentage of our work force increase is through these managed services deals," Livermore said.