Freightliner Llc has built a heavy-duty business selling auto parts, but the truck makers efforts were not without a full load of IT issues. To support the parts business, the truck and heavy equipment maker had to link its manufacturing facilities, warehouses and 300 service stations into one large extranet, which was costing the company $25 million a month. Weary of the expense and IT burden, Freightliner turned to an experienced—if little-known—management service provider.
T-Systems International Inc. offered to manage Freightliners parts technology infrastructure for $25 million a month, minus a preset amount on every dollar T-Systems saves. For the first nine months of the project, the services company wrote Freightliner a check for $10 million.
"We like this example because it is a project that worked well, and Freightliner is a great example of how we can help—after all, their business is running trucks, not IT," said Ray Shealy, vice president of marketing and service development at T-Systems North America, in Lisle, Ill.
Call it the ultimate stealth player in the managed service market, but despite the fact T-Systems has billions of dollars in revenue, thousands of employees and some big customer names to show for its marketing efforts, its name is hardly known to mainstream companies evaluating offers from the likes of Loudcloud Inc. and WorldCom Inc.
A subsidiary of Bonn, Germany, telco Deutsche Telekom AG, T-Systems is one of four business units that make up the company, with a mandate similar to American competitors such as Electronic Data Systems Corp. T-Systems employs 40,000 and posted revenues of $10 billion last year, the second-largest company in the DT family after the telecom unit. Of 25 data centers, T-Systems has two in the United States, one near DT American headquarters in Chicago and one in New York.
IT managers that have outsourced Web hosting and other enterprise computing functions such as e-mail server maintenance, intranet management and supply chain support said T-Systems is among the best-kept secrets in the business. The service provider is competitively priced and has better service reliability and customer management processes, they said.
"Without T-Systems, we are nothing but another Web developing company," said Mike Kolin, chief operating officer of Manta Media Inc., in Hanover Park, Ill., which hosts all of its 52 application service provider and e-commerce customers in T Systems Chicago data center.
Furnishing excellent service to relatively small customers comes naturally to T-Systems, as it cut its teeth in the U.S. market on large outsourcing projects that until recently were believed to be the companys forte.
Freightliners savings came from outsourcing its entire network operation to T-Systems, from browsers running on computers used by dealers to order parts to changing configurations of servers processing those orders. T-Systems introduced wireless devices in service bays so mechanics could access maintenance histories and design configurations to improve the efficiency of service operations.
Some analysts tracking the company think that as Europes second-largest systems integrator, T-Systems should stick to customers such as Freightliner. American observers dont see T-Systems as a large player in either the hosting or managed service arena in the United States, as most of its business comes from existing DT customers that have developed a need for Web services.
"They are still riding DTs coattails," said Joel Yaffe, an analyst with Giga Information Group, in Cambridge, Mass.
Customers that have experienced T-Systems hosting firsthand disagree. Manta Medias Kolin said it is critical for him to have a partner that will have no outages and no turnover. "When we used UUNet, every week they had a different rep calling me; they didnt even know I was already using them," he said. "We had T-Systems for four years and havent had a single outage."
Reliability is important to Manta Media because it builds communications and e-commerce systems for enterprise customers. Through Manta Media, trade show exhibit maker Chicago Exhibit Productions Inc. hosts its e-mail and order processing.
"If our customers cant get communication back and forth in a timely fashion, you are out of the water, because people have to have drawings in hand when they go and make proposals," said Steve Bruha, director of marketing at Chicago Exhibit Productions, of Bolingbrook, Ill. "This is a cutthroat industry—if a customer feels there is a slack in response time, they will go elsewhere."
With 12,000 trade shows canceled after the Sept. 11 tragedy, Chicago Exhibit Productions needs a reliable outsourcer more than ever. T-Systems said it hopes to parlay this sudden need in simple business reliability into more business.
"The outsourcing market is pretty saturated. I think there is going to be some growth there, but I dont think it is going to be as big as in the managed service area," said T-Systems Shealy.
Max Smetannikov is a free-lancer based in Washington. He can be reached at [email protected]