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Nokia extends outsourcing deal with HP

The deal is valued at about $100 million, but the handset maker will be billed based on actual service consumption.

Nokia has extended its outsourcing contract with Hewlett-Packard for five years, HP said Wednesday.

Under the deal, HP will continue to manage the IT infrastructure and operations for Nokia's network and for its messaging and groupware systems. The original deal was signed in 2001, and the two companies decided early this year to extend it.

HP said Nokia will move to a service-based model under the new agreement, which is valued at about $100 million annually. This will help Nokia cut costs, as the handset maker will be billed based on actual service consumption, HP said.

"We feel that the service-based approach is the natural evolution of the existing outsourcing initiative between HP and Nokia," Francesco Serafini, senior vice president at HP, said in a statement. "HP will move from a technology and operationally driven service model to a business needs- and service-level-driven model."

As part of the push for its Adaptive Enterprise strategy, HP has signed a string of outsourcing deals with companies to manage their IT infrastructures. Rivals IBM and Electronic Data Systems have also been luring companies into similar service deals.