NEC, HP To Form Outsourcing Services Alliance

NEC signed a memorandum of understanding with Hewlett-Packard to form an alliance to jointly provide outsourcing services to the companies' enterprise clients. The deal promises each company an entry point into one another's key geographical markets.

Earlier this year, in a bid to expand its systems integration business, NEC invested in e-business services firm Niteo. Now a wholly owned subsidiary of NEC, Niteo was founded by several people from Zefer, a solution provider that went bankrupt in September 2001.

NEC and HP executives said the outsourcing deal gives NEC a greater services toehold in the United States, while HP will benefit from NEC's powerhouse presence in Japan.

Under the deal, HP expects to offer data center and server management services, as well as storage and help-desk offerings, according to Steve Hanney, worldwide director of alliances for HP Services.

"As far as our managed services go, we are a multi-vendor support organization," Hanney said. However, "HP will be the preferred infrastructure if the client is not requesting a specific technology."

Yuji Ichimura, general manager for corporate planning and business strategy at NEC division NEC Solutions America, said the U.S. business derives only about 20 percent of its revenue from services.

Yet looking at NEC's global business, more than half,about 55 percent,comes from services, he said.

"Our emphasis is on [growing services, but the optical media and server businesses are also expanding," Ichimura said.

Ichimura oversaw the deal with Niteo in February. Niteo CEO John Kelly said the subsequent 10 months have yielded new business for Niteo.

With NEC's backing, Niteo has done middleware and content management work for clients, partnering with BEA Systems, Epicentric, Interwoven and others.