October 20, 1997

National Taps Perot Car-rental company lured by speed for client-server job By Bruce Caldwell fter outsourcing operations to EDS for more than six years, National Car Rental System Inc. last week switched to Perot Systems Corp. for a five-year deal that includes development of an extensive client-server business system. Perot's ability to quickly supply that system, which will handle reservations and other core functions, was a key factor in winning the deal, according to Perot and analysts. National has undergone several changes in ownership over the past decade, leading to renegotiations of its long-running EDS contract. Initially, in 1991, when General Motors Corp. held a stake in National, EDS (then a subsidiary of GM) won a 10-year, $500 million contract with the car-rental company, according to Karl Keirstead, a securities analyst at Lehman Bros., an investment bank in New York. In 1995, GM sold National to an investment group, which last January sold National to Republic Industries Inc., based in Fort Lauderdale, Fla. According to Keirstead, the renegotiated EDS contract was expected to end in the first quarter of 1998. But earlier this year when National sought competitive bids for a new, client-server system to support its operations, speed to market was a critical factor, says Keirstead, and Perot Systems won the contract with a promise to begin rolling out the new system within a year. EDS proposed an 18-month schedule and admits that Perot offered a faster implementation time frame. Perot Systems will also create an intranet for National and manage the operations of the new systems. Overall, Keirstead estimates the five-year deal is worth between $300 million and $350 million. A spokeswoman for Perot Systems, based in Dallas, says that the company's previous experience in building a client-server, Oracle database system for another car-rental firm, Europcar Interrent, was a "big plus" in winning the National deal. Elements of that system will be modified for use at National, according to the spokeswoman. National "wanted to get to market with a new technology," says William Doody, head of business development for the travel sector at Perot Systems. A twist in the tale is that National, based in Minneapolis, has for several years had a marketing agreement with Europcar, which has operations throughout Europe. That agreement ends next January, and the following month National will begin operating under its own brand name at 700 locations in Europe, the Middle East, and Africa. Back to News in Review Send Us Your Feedback Top of the Page

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