Category Archives: IT services

HPE and Blackstone agree $825 million deal for Indian IT services business

Plant in front of a creative working deskHPE has announced its intention to sell its majority stake in Mphasis in a deal with Blackstone, believed to work in the region of $825 million.

The company said that Blackstone has agreed to purchase at least 84% of its stake in Mphasis for INR 430 per share. Blackstone will purchase the maximum amount of the remaining 16% stake that is permitted by Indian securities laws and subject to the outcome of a mandatory tender offer between signing and closing. Assuming the values are correct, HPE’s in the Indian business would be values in the region of $825 million.

Indian IT Services company Mphasis has been part of the HPE group since 2008, after its parent company EDS was wholly acquired by HPE. The company had 23,000 staff at the end of the quarter, delivering both business process outsourcing and IT services.

“While our financial relationship is changing, the business and commercial relationship with Mphasis remains an important part of our service delivery strategy,” said Mike Nefkens, GM of HPE Enterprise Services. “We remain committed to our strategic partnership with Mphasis and to providing our customers with the high level of service and support they expect from HPE.”

It is believed that the deal represents a move from HPE to remove business components which do not line with future business objectives. In recent weeks, the company has made moves to improve its position in a number of markets including cloud infrastructure equipment market and machines learning. While the deal may represent HPE moving away from the Indian IT services market, it will not affect the commercial relationship between the two companies.

HPE plans to renew the current master services agreement with Mphasis for another five years in connection with this transaction. It is estimated that HPE business accounted for 24 percent of the Indian company’s total revenue of rupees 15 billion in the fourth quarter of 2015.

Colt bows to competition, exits IT services

Colt is bowing out of the increasingly saturated IT services market

Colt is bowing out of the increasingly saturated IT services market

In a bid to increase profitability Colt announced this week that the company would exit the IT services market and put greater focus on its “core” services including its network, voice and datacentre services.

The company said its “managed exit” from the IT services market would also allow it to focus on offering datacentre services (colocation, cloud) and optimise use of its assets.

“Our IT services business would continue to need considerable investment in the short-to-medium term in order to deliver profitability and we do not believe this business can compete and grow successfully with a level of risk that is acceptable,” the company said in a statement Tuesday.

“Colt will continue to honour existing customer contracts through to termination, but will no longer seek new business.”

“The recent performance of IT Services has shown few signs of improving in accordance with the targets we set to deliver appropriate profit and cash returns in the medium term.”

The company anticipates the move will save about €25m annually, though it expects to incur cash and non-cash impairment charges of €45m to €55m and around €90m, respectively. Revenue from IT services is expected to decline €20m annually will become immaterial by 2018, it said.

“The fundamentals of our core network services and voice services businesses remain solid, and we are driving improvements in our datacentre services business. We are taking decisive action to become a more focused and disciplined organisation which we believe will accelerate the performance of our Core Business,” said Rakesh Bhasin, Colt chief executive.

“Overall, we believe the prospects for the Group are good and I am confident that, with the recent changes we have made within the senior management team, we will be able to deliver improved profitability and cash returns,” he added.

Colt still owns and will continue to operate its 22 carrier neutral datacentres in Europe and 7 in the Asia Pacific region (including those acquired through Japanese IT services provider KVH last year), though its goal of moving away from IT services may also mean a pivot towards becoming more of a systems integrator, which – like the IT services market – is quite competitive, and it isn’t entirely clear how the company intends to differentiate from other large incumbents in this space.

5 Ways to Understand Your Applications and IT Services

How do you view your organization’s applications and IT services? At GreenPages, we often suggest that organizations begin to conceptualize IT services as corporate IT evolves from a technology provider to an innovation center. Now, there are ways to establish and maintain a service portfolio through ITBM (IT Business Management or IT Financial Management) systems, but these are often out of reach for customers less than enterprise level. However, you can conceptualize IT services by looking at your applications from five different perspectives. Let’s use Microsoft Exchange as an example.

applications and IT servicesExchange is an enterprise application that provides email and calendaring. If you’re reading this, there is a good chance that you own servers that host the various components that comprise Exchange. One way to think about cloud is to identify the Exchange servers, their operating systems, the application version, performance requirements, etc. and identify a “place in the cloud” where you can procure servers of similar specifications and migrate the instances. I consider this as the infrastructure perspective. When it comes to cloud computing, this is perhaps the least important.


To take full advantage of cloud computing, understand your applications and IT services from a few additional perspectives:

  1. Functional
  2. Financial
  3. Operational (including lifecycle)
  4. Organizational
  5. Use-case


Hopefully, after looking at these different perspectives, you’ll see Exchange as part of an IT service that fits this description:

“In operation for over 20 years, E-Communications is a business service that allows each of our 1,200 employees to communicate through email, coordinate meetings, find coworkers’ contact information, and organize tasks using their PC, Mac, mobile device, or home computer 24x7x365. The service is supported by Microsoft Exchange and Active Directory, which both run under VMware vSphere. The service requires 1 full-time administrator who added 12 new users and logged 157 support tickets in 2014. In 2014, charges for software maintenance, personnel, infrastructure depreciation, and outside support services totaled $87,456. A software upgrade is planned for 2015. Users do not generally complain about the performance of the service, other than the size of their mailbox quotas (which are limited to 10GB per user). The company as a whole plans to offer telecommuting packages to more than 250 employees in 2015.”

Armed with this understanding of your IT service that includes Exchange, you might take the following action:

  1. Fund an Office365 migration with capital you had allocated for the Exchange upgrade project
  2. Provide copies of Office applications to telecommuters (without additional charge)
  3. Expand the mailbox quota from 10GB to 50GB
  4. Repurpose your Exchange admin to help telecommuters establish their home offices in 2015
  5. Reduce your spend on E-Communications by more than 50% (from $72.88/user to $35.00/user)


Of course, not every application is easily identifiable as belonging to an IT service. The functionality or financial aspects of IT services are often difficult to quantify. However, at GreenPages, especially when looking at cloud computing options, we recommend examining all of your applications through these five perspectives. For this reason, GreenPages has embedded this process in a piece of software that can quickly build your services portfolio and recommend optimizations based on current offerings available – such as Microsoft Office 365.

What are your thoughts?

You can hear more from John in his eBook, “The Evolution of Your Corporate IT Department

By John Dixon, Director of Cloud Services