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On February 23, 2015 Vodafone Global Enterprise (VGE) announced that it had agreed a deal with Deutsche Bank to deliver and support fixed and mobile voice services across 28 countries. The goal is to help Deutsche Bank gain greater control over its telecoms usage and expenditure. The services VGE will provide for the bank will include its telecoms management platform and a full telecoms expense management service, including contract management. One day later, on February 24, 2015, HP announced that it had won a contract with Deutsche Bank to provide dedicated datacenter services on demand, including storage, platform, and hosting. Although mostly focused on Deutsche’s wholesale banking functions, the deal forms a key part of the bank’s IT transformation program, helping it upgrade and reduce the number of its IT applications by moving them onto the HP platform. These two successive pieces of news about one client tell an important tale about the telco role in IT.

A strong win for Vodafone, but one light on IT

The Deutsche Bank deal represents a very good win for Vodafone. The operator has been investing heavily in its VGE unit, which itself has started to benefit handsomely from the converged fixed and mobile capabilities that came to it via Cable & Wireless Worldwide. For Vodafone, and indeed for most telcos, capturing both fixed and mobile voice services pillars for a blue-chip client such as Deutsche Bank is more than a small victory. Converged deals across fixed and mobile are still rarities.

However, the Vodafone deal does not include IT, the holy grail for many telco global services units. Instead, a chunk of Deutsche Bank’s IT went to HP. This makes sense: Vodafone is still in the midst of building out its cloud service stack across the globe, and so is not in a position to compete effectively against the likes of HP. In fact, it is unlikely that it would ever intend to compete. Instead, it is working in quiet partnership with the IT services giant.

Of course, HP has a longstanding relationship with BT Global Services. At the time the partnership was struck, BT’s goal (perhaps unstated, yet strongly implied) was to undertake IT projects jointly with HP. Lessons have been learned by all, and with the benefit of hindsight it seems that Vodafone is not so naive: it realizes that it can never sell application-oriented IT services to firms such as Deutsche Bank. Its quiet partnership with HP will serve to make it easier for Vodafone to sell what it does best, rather than to step on HP’s toes.

Although both providers clearly win from this arrangement, Ovum cannot help but think that Vodafone may be on to something: HP is selling complex, lower-margin services, yet helping Vodafone to sell high-volume, higher-margin services.


Further reading

Enterprise Insights: Sourcing Trends, TE0005-000683 (February 2015)


Evan Kirchheimer, Practice Leader, Enterprise Services

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