Fujitsu America and Alliance Data have entered a 10-year, $440 million deal that will enable the newly formed company to grow its outsourcing and managed services capabilities in North America. Fujitsu America was created in April when parent company Fujitsu Ltd. merged three other subsidiaries, and a key driver was the desire to invest more in managed services.
When Fujitsu America was formed in April through the merger of three other Fujitsu subsidiaries, President and CEO Farhat Ali said the new company not only would continue to expand its traditional businesses, but also move into new ones.
"We will invest in managed services, cloud computing and industry-specific solutions," Ali said in a videotaped speech.
Fujitsu America began fulfilling that promise June 25, inking a $440 million, 10-year outsourcing and managed services contract with Alliance Data, which creates and sells loyalty and marketing solutions.
The deal calls for Fujitsu to assume Alliance Data's ITS (Information Technology Services) function, which services Alliance Data business units and five other clients. In addition, Fujitsu is gaining Alliance Data's existing Tier 3 data center, assets and people. Fujitsu officials estimate that the Tier 3 part of the deal will have an initial value of more than $40 million, which expands the company's infrastructure services capabilities.
More than 180 Alliance Data employees will move to Fujitsu, growing the company's services capabilities in mainframes, servers, networking and service desk operations.
In a statement, Ali said the deal validates the decision to consolidate the three companies into one, and "firmly establishes us as one of the leading North American IT services companies and substantially expands the range of IT solutions this economic climate demands."
Fujitsu Ltd. on April 1 announced the creation of Fujitsu America, which was born from the merging of the applications services of Fujitsu Consulting, the systems platforms of Fujitsu Computer Systems, and the retailing operations of Fujitsu Transaction Solutions.
The goal was to expand the reach of Fujitsu in North America. The parent company is a key player in the Asian markets and elsewhere overseas, but is less successful in its competition with such giants as Dell, Hewlett-Packard, IBM and Sun Microsystems in North America. In his April 1 videotaped presentation, Ali said Fujitsu has about 10,000 enterprise clients in North America.
By merging the three companies into one, Fujitsu is hoping to give businesses a single place to get their Fujitsu products and services.