EDS And MCI WorldCom Firm Up $12.4 Billion Outsourcing Deal

EDS and MCI WorldCom today finalized two outsourcing agreements worth $12.4 billion over the next 11 years allowing for the transfer of IT services and personnel between the companies.

In an agreement worth $6.4 billion, 1,300 MCI WorldCom employees will transfer to EDS as EDS assumes IT system operations at more than 12 MCI WorldCom processing centers worldwide. In the other direction, EDS will outsource the network operations, management, and engineering functions of its global network operations to MCI WorldCom, in a deal worth about $6 billion, transferring 1,000 EDS employees to MCI WorldCom in the process.

As first announced in February, EDS and MCI WorldCom hope to better position themselves to capitalize on rapid growth in electronic business and global communications services. "These agreements allow our companies to grow our core businesses and expand service on a global basis. Each company is now better positioned to provide customers with premier communications infrastructure and information technology services," says John Sidgmore, vice chairman of MCI WorldCom.

"EDS sees MCI WorldCom as a networking provider that we are comfortable outsourcing our network operations, network management, and network engineering and design to," says Dan Zadorozny, EDS client executive for MCI WorldCom. "MCI WorldCom will make hard-core investments in switches and fibers, so EDS will keep its network under WorldCom control, rather than entering into a situation where EDS's network traffic is handed off from provider to provider."