Cisco Helping EDS Pioneer New Model for Information Systems Outsourcing

Industry leaders building future of business communications with unprecedented global IP/MPLS network

by Charles Waltner, News@Cisco

The company that pioneered the information technology outsourcing business is doing it again, this time with a little help from Cisco.

Since early 2004, EDS, the world's second largest information technology (IT) services provider with annual revenue of more than $20 billion, has been reinventing its business and pioneering a new model for helping its customers manage their information technology resources. A major part of that effort includes expanding its strategic alliance with Cisco.

EDS, headquartered in Plano, Texas, has turned to Cisco for assistance with its new network-centric computing model, which emphasizes the network as a strategic cornerstone for delivering the highest quality and best value outsourcing services in the industry. Cisco is also providing EDS with invaluable insights into partnering, another key to EDS’s business strategy.

While Cisco is providing EDS with networking expertise and partnering acumen, Cisco's work with EDS offers the networking vendor an outstanding venue for accessing new customers, as well as gaining insights into the outsourcing and data center markets.

As a major part of its overhaul, EDS has formed the EDS Agility Alliance, a federation of market-leading computer and networking equipment and application vendors that are collaborating to innovate, develop, and deliver the EDS Agile Enterprise Platform – EDS's next-generation global outsourcing delivery system. EDS Agility Alliance partners include Cisco, Dell, EMC, Microsoft, Oracle, SAP, Sun Microsystems, Towers Perrin, and Xerox. "This is something no one has ever done," says P.K. Sharma, EDS’s director of the Cisco alliance. "We have the best of the best ready to help our customers in any way they need."

According to EDS, Cisco has been playing a pivotal role in the EDS Agility Alliance. Together, the two companies are building a state-of-the-art global networking infrastructure for connecting EDS's computing resources to its customers virtually anywhere in the world. EDS's Global Services Network (GSN) runs MultiProtocol Label Switching (MPLS) throughout the Internet Protocol (IP)-based infrastructure. The MPLS standard makes it possible to easily run other types of traffic, such as frame relay or ATM, on an IP network. And just as importantly, MPLS makes it easier to manage such capabilities as quality of service (QoS) and traffic prioritization, which are required for high-performance, real-time voice and video applications.

MPLS is the preferred technology for EDS, since the outsourcer is now focused on helping its customers transition from older legacy technologies to far more efficient, manageable, and flexible IP-based communications. With its state-of-the-art network, EDS will be able to more effectively provision, monitor, and manage its customers' network and computing resources.

Cisco and EDS have had a strategic alliance since 1997, but until recently it focused mostly on one-off sales opportunities. But in 2004, EDS conducted extensive research on a new, multiyear business plan for rejuvenating the company. The conclusion: network-centric computing outsourcing was the way to go. And so it turned to Cisco, as the worldwide leader in IP networking, to help it with its new game plan. "The network has gone from important to strategic in our efforts to provide the industry's highest quality and most innovative computing services," Sharma says.

EDS became famous for taking over the computing operations of large companies and squeezing expenses out of them. But Sharma says that businesses have gotten just about all they can out of their older legacy computer systems. The only way for organizations to get new value and productivity gains from their computing investments is to migrate to modern, IP-based networks.

"Our old business model was much more about dealing with the past and keeping existing computing systems working as efficiently as possible," Sharma says. "Now our business is about helping our customers transform computing systems for the future. The old legacy systems just can no longer effectively support the technologies that are now a part of everyday business."

While EDS will continue to offer organizations any kind of IT outsourcing support they may want, the company now has a clear vision about the best way to maximize investments. "Before, we were completely agnostic about technology," Sharma says. "But now with the EDS Agility Alliance, we have the leaders in the industry as providers of our platform components. We believe this is the best approach to assuring our customers get the most value out of their IT investments."

And key to this strategy is partnering. Cisco, which has used partnering as a foundation to its business, is providing EDS with invaluable advice about managing the ambitious EDS Agility Alliance, Sharma says. "They've been incredibly supportive in making the alliance a true federation of companies working in concert for the benefit of our mutual customers," he adds.

In another testament to the vitality of their alliance, EDS and Cisco are making concerted efforts to coordinate their sales forces. Traditionally, outsourcers have blocked vendors from talking with customers. Now, EDS wants its EDS Agility Alliance partners at the table. "We've been working on educating our sales teams," Sharma says. "Now when there's a lead and we need networking expertise, our sales people know that they can call on Cisco. And their people know they can turn to EDS for IT consulting and outsourcing help."

The new relationship has already resulted in major customer wins for both companies. Cisco and EDS combined to land contracts with Bank of America as well as timber giant Weyerhaeuser. While the computing industry has undergone dramatic changes over the last year, some things remain the same. Cisco and EDS are continuing to point the way to the future of business communications.