back to article Aviva dumps DXC, shoves data centre support at Atos

Atos is lined up to replace DXC Technologies as the sole supplier of data centre hosting services to insurance giant Aviva when the existing deal times out in some 19 months. As El Reg exclusively revealed in November, Aviva was one of a number of customers that had decided to look for alternatives rather than renew contracts …

  1. Anonymous Coward
    Anonymous Coward

    How many customers do they have left

    They seem to loose at least two major customers per year in the UK.

    1. Anonymous Coward
      Anonymous Coward

      Re: How many customers do they have left

      If we didn't keep losing customers we wouldn't have enough staff to even make a pretence of fulfilling our contractual obligations.

      The balancing act is to drive the company into the ground slowly enough for the parasites at the top to prolong their asset stripping for as long as possible.

    2. Korev Silver badge

      Re: How many customers do they have left

      I guess the bigger question is if they are replacing the customers or not*. This kind of "churn" is to be expected when contracts go out to tender.

      *someone please chip in if they know the answer

      1. Anonymous Coward
        Anonymous Coward

        Re: How many customers do they have left

        "someone please chip in if they know the answer"

        No, they aren't. Hence getting rid of staff. And then they can't maintain contracts. And then no one renews. A downward spiral, or "spinning around the plug hole". Same as IBM, but DXC probably have less cushion.

        The only way to fix is to ... actually, they are fucked. Can't fix. (was gonna say a truly visionary leader who can give them the kind of R&D injection they need)

      2. Anonymous Coward
        Anonymous Coward

        Re: How many customers do they have left

        Yes they are replacing customers.

        1. Miss Lincolnshire

          Re: How many customers do they have left

          .............................. with ex customers that wouldn't touch them with a bargepole.

          I understand that Worcestershire County Council is also going back in house having found out about outsourcing to HPE ES the hard way.

  2. jason 7

    Aviva

    Had it's own purpose built Data Centre in Norwich. I went in there a few times over the years and it was interesting to watch the amount of data go up but the size of the hardware go down. Even the tape robot vanished a long time ago. Now it's run by an independent firm that are doing very well with it. Looks very different now of course.

    1. Ledswinger Silver badge

      Re: Aviva

      IMHO they shouldn't have outsourced any of the IT. In most large customer service companies, management persuade themselves that they are "an energy company" or "an insurance company" or "a telecoms company", or "an entertainment company". Having deluded themselves thus, IT becomes a cost, an inconvenience, something that's difficult, costly, unwanted. So despite having critical mass to do it themselves efficiently, they outsource it. That produces bad results, so at the end of the deal they re-source it to another snake-oil salesman, the new deal looks great for eighteen months, then it all goes down hill until they can renew the contract with somebody else, each time incurring a lot of upheaval costs and disruption.

      But that management thinking about who they are is mere delusion, retreating into their own comfort zone - the management are invariably technocrats from the insurance, energy telecoms product side of the business. Marketing (who ought to be siding with IT) tends to be dominated by red-braces know nothing twats, or simply people unsuccessful anywhere else in the business, rather than data experts, and IT themselves are outnumbered, downtrodden and undervalued.

      Almost all of the big names touting for our business as individuals are asset-light services retailers, whose business model is in fact a data-driven IT business, that happens to specialise in retailing one or two product lines. The core competencies should be around maintaining customer relationships, having a very good grasp on what new products can be sold to whom, managing high volumes of data well, and offering customers excellent contact options - phones answered quickly by humans, great on-line presence, well managed well targeted communications, and excellent analytics. IT should be something they're not good at, they should be brilliant at it. They should have near 100% control over it, and it should differentiate their business from less well organised competitors. This might just happen in an alternate universe.

      1. Fading Silver badge
        Thumb Up

        Re: Aviva

        Cough - stealing and paraphrasing the above to convince the director to keep my new project in house......

        1. Ledswinger Silver badge

          Re: Aviva

          stealing and paraphrasing the above to convince the director to keep my new project in house

          You're welcome!

          In addition to making the case that all modern large customer businesses are IT businesses with a bit of sector focus as an add on, don't forget to try and include a list of failed outsource projects, going back as far as you can, and put this under a "Risk" section. If relevant, include the IBM/Cable & Wireless dispute, that was a monster. Also do a search on the subject of "bringing outsourced IT back in house" for a list of more failures and cost problems.

      2. Anonymous Coward
        Anonymous Coward

        Re: Aviva

        If you aren't outsourcing any IT then you presumably aren't using any cloud hosting. Are you really suggesting this?

      3. Anonymous Coward
        Anonymous Coward

        Re: IT should be something they're not good at, they should be brilliant at it.

        So we just need a few devops seminars then. Right? Where do I sign?

      4. Frank Gerlach #2

        Well

        Now the economic consequences of cheap fiber communications, including international ones, materialize. The cheap Indian/Sri Lankan/Viet Nam guys can now do quite a few jobs we once did here. They can feed and house a family of five for $500/month.

        Tough for a 1st world citizen to compete with these economics and not all IT activities can differentiate your company from the competition.

        Of course, IF in-house IT manages to be a competitive edge, this should result in such companies to win the upper hand. Other companies will notice and undo the outsourcing and offshoring.

        I also guess that quite a few IT people reconsider their fanboyship of Ayn Rand et al. Because the tough part has caught up to themselves.

      5. naughtyrich

        Re: Aviva

        Brilliant summary and couldn't agree more having experienced it in the energy sector.

        IT isn't a support function but an integral and value-add part of almost every company.

        Unfortunately many realise it too late...

    2. Anonymous Coward
      Anonymous Coward

      Re: Aviva

      They actually had 3. The one you mention was the original Norwich Union DC, they then purchased an industrial building to become the second DC followed by a massive custom built one known as DC3 - http://www.lsiarchitects.co.uk/projects/data-centre-3/. The second and third DCs were part of the original deal with EDS and were the ones that HPE-ES wanted to close down.

  3. Korev Silver badge

    HPE ES intended to close the bit barns but Aviva disagreed with this and was a source of tension between supplier and customer, several people familiar with the matter told us.

    If this was so important to the company, then shouldn't they have kept this in house?

    1. Frank Gerlach #2

      I guess they wanted to eat the cake and keep it also.

  4. Anonymous Coward
    Anonymous Coward

    Who knows what DXC Management are thinking

    This is being spun by DXC Management as a good thing...

    I’ll have whatever Nick Wilson has been smoking for the past 12 months.

    1. Anonymous Coward
      Anonymous Coward

      Re: Who knows what DXC Management are thinking

      It is a good thing - for Nick Wilson - he's making millions and he's breaking DXC so slowly he can continue to do so for some time. His interest in the survival of the company is that of a parasite-host relationship - he doesn't want the host to die before he's finished gorging himself.

      1. Anonymous Coward
        Anonymous Coward

        Re: Who knows what DXC Management are thinking

        I wouldn't count on him being there a lot longer.

  5. Anonymous Coward
    Anonymous Coward

    balanced view

    Not a bad deal 10 years ago and shows Aviva more in a bad light than HP.

    Shame HP (DCX) have to factor in the behemoth running costs of a vast organization and

    all they can do is cut staff to compete with those tiny companies offering a similar service.

    I know the hapless CDX incumbents say keep the staff and grow the business but do they have the skills?

    Not all doom and gloom as we just had Trumps corporate tax cuts so maybe we are on another one of those exciting boom times for the US giants of multi year deals.

  6. doug_bostrom

    The beautiful but imaginary efficiency of bungled outsourcing demonstrated yet again.

    Choose another sole supplier and imagine things will be better this time, despite witlessly yet again buying into the private sector equivalent of a planned economy but an economy with an important difference: it's actually designed and intended to perform inefficiently for the customer.

    By sole-sourcing, we remove the single reason to put up with the inefficiencies axiomatically entailed in supporting somebody else's business plan. Only real competition provides the existentially threatening level of motivation for an external business plan to actually perform beneficially for your own.

    Figure it out: the reason for Aviva's existence is to divert money from performing services or goods or whatever is on sale, as with all private sector enterprises. Profit is the objective. Yet from our perspective as customers other people's profit paid from our money is waste.

    With no checks on this motivation in the form of stiff competition the story will always end sadly and badly for the customer.

  7. Anonymous Coward
    Anonymous Coward

    The good news

    At least DXC won't have to lay off any data centre staff as a result of losing this contract - they got rid of them a few years ago.

    Correlation or causation or incompetent management - my guess is only DXC management would consider this an anomaly in their outsourcing business. Maybe HP could bring them back in-house to service their printer empire? As field engineers, not management....

  8. Anonymous Coward
    Anonymous Coward

    DXC aren’t visibly replacing the customers lost.

    I am forced to wonder if that is partly at least because of the way the HP side of the newco arrived in DXC tied to problematic HP software along with horribly expensive hardware leasing & support from HP sub-companies like CDS. Along with that went a requirement to use HP products wherever possible leaving the service-providing areas prey to HP sales people who saw them as excellent commission fodder where the boldest of fibs about performance & function could be told and the consequences ignored. On top of that was an internal training system that was recognised only by HP and which operational staff weren’t given any time to use anyhow. This left a situation where key individual knowledgeable staff, especially those off-shore, were the only ones in their teams that really knew how to configure & manage things. As soon as they left the teams were scuppered and problem solving hit the floor.

    I’ve put this all in the past tense but of course it’s still the way it is now, except that there’s moves to get away from the “use HP products come what may” stranglehold. Of course that could well just put DXC into a “become CSC” mode which won’t help that much either. Both HPES & CSC were monolithic in their own way, the trick now will be to be even bigger but not monolithic. I have hope it’ll happen but I can’t see that it’ll be likely because the management of DXC think cost cutting is the only way to go - a justification all in and of its own.

    Anonymous because, well, duh.

    1. Anonymous Coward
      Anonymous Coward

      The "sell HP at all costs" mandate came about because Mark Hurd went apeshit when he caught EDS selling EMC hardware. Part of the problem was that EDS liked to use very old technology and quite frankly didn't understand how a modern data center should work.

  9. Anonymous Coward
    Anonymous Coward

    Why "raping customers" isn't a good idea.

    This is what happens I suppose to a business (EDS) which used to openly refer to "raping customers". HP Managed Services (which got consumed by EDS during the acquisition) used to do the same.

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