Compaq lands Blue Cross Blue Shield deal

The computer maker's global services arm is set to announce a five-year, multimillion dollar technology services contract with the health care provider.

2 min read
Compaq Global Services, the computer maker's services arm, is set to announce Monday a five-year, multimillion dollar technology services contract with Blue Cross Blue Shield of Michigan, winning the deal over rivals IBM Global Services, Electronic Data Systems and others.

Houston-based Compaq Computer is looking to bolster its services revenue, which has recently sagged amid a downturn in technology spending. Compaq Global Services accounts for 15 percent of the company's total revenue.

Effective immediately, Compaq Global said it will provide help desk support, on-site software support, remedial maintenance, and asset management services at Blue Cross Blue Shield (BCBSM) offices statewide. The deal, one of Compaq's largest to date, calls for supporting some 8,500 employees.

Last quarter, Compaq saw its services revenue decline slightly to $1.8 billion, from $1.9 billion during the same period a year ago. Income dropped to $241 million, from $275 million a year earlier. With consumer PC sales sluggish, the company has been aiming to rely on its business-computer sales and services units to pick up the revenue slack.

Though the demand for technology services and consulting overall has cooled, larger, traditional services providers such as Compaq Global, IBM Global and EDS have been able to win a solid number of deals because of their trusted brand and sheer size.

Meanwhile, most players in the sector--especially those that focused on Internet-related services--have been scrambling to land new business, turning their focus away from serving cash-strapped dot-coms to nabbing more lucrative and traditional outsourcing engagements such as the BCBSM contract.

On top of beating out giant rivals IBM Global Services and EDS for the project, Compaq Global also said it won the deal over 13 other providers including Unisys and GE IT Solutions. BCBSM provides health care payment services for nearly 4.8 million members.