VAR500 Roundup: ACS Wins California Contract, Cerner Bookings Up, And More

Some VARs moved ahead recently, as ACS won a contract to manage the California Medicaid Management Information System, and Cerner reported increased bookings. But others hit a rough patch, as BAE announced more layoffs and Fiserv showed flat Q1 revenue.

ACS To Manage California Health System

Affiliated Computer Services, (ACS), a Xerox company, (2009 VAR500 rank: 23) has signed a 10-year contract to manage California’s Medicaid Management Information System, worth $1.6 billion. The goal is to provide technological advancements and cost savings to enable more state resources to be focused on health coverage for Californians.

ACS will also handle fiscal intermediary services, including provider claims payment, provider and stakeholder relations and training, beneficiary relationship services, telephone service centers, security and privacy protections.

Working with IBM and CGI, ACS will provide health care services for more than seven million beneficiaries from more than 80,000 health care providers throughout the state.

’ACS has provided critical services to government agencies in California for more than 25 years. Our partnership with Medi-Cal is the latest chapter in a history of innovation and service to the state,’ said Lynn Blodgett, president and CEO of ACS.

BAE Systems Continues Layoffs

More than 600 people have lost their jobs at BAE Systems (2009 VAR500 rank: 20) since March.

BAE cut roughly 300 contractors in March. In April, the government integrator cut 180 full-time employees. Most recently, in the beginning of May, it gave pink slips to 130 employees, bringing the total to 610 employees that have lost jobs.

The layoffs are mostly the result of several major BAE contracts with the government ending. This latest round of job cuts puts BAE Systems at 1,190 employees.

Fiserv Reports Flat Revenue

Fiserv (2009 VAR500 rank: 36), which provides financial services technology solutions, reported first quarter revenue of $1.01 billion for the quarter ending March 31, 2010, compared with $1.02 billion for the same quarter in 2009. Net income was $121 million, up from $103 million for the same quarter last year.

"Solid performance by our recurring revenue-based businesses in the quarter produced financial results in line with our expectations," said Jeffery Yabuki, (left), president and CEO of Fiserv. "We are funding new product investments in several strategic areas to provide innovation the market demands, while delivering value for our shareholders in the short and long term."

Qwest Sued Over CenturyTel Offer

Qwest (2007 VAR500 rank: 19) has been sued by shareholders seeking more money in a planned $10 billion stock-swap acquisition by CenturyTel, according to published reports. Qwest investors Lorrieann Martin and Mark Respler asked a judge to halt the takeover and award damages. Martin and Respler claim that selling the company at a "relatively low current trading price in a recession-depressed market raises serious red flags" and they question whether directors are working in the best interests of shareholders, according to the reports. CenturyTel is offering 0.1664 CenturyTel shares for each share of Qwest. CenturyTel Chief Executive Glen Post, (left), would be CEO of the combined company.

Cerner Reports Bookings Up

Health care solution provider Cerner (2009 VAR500 rank: 73) saw strong levels of bookings, earnings and cash flows in the first quarter of 2010. New business bookings revenue, which reflects the value of executed contracts for software, hardware and professional services and managed services, was $404.9 million in the first quarter of 2010, an increase of 22 percent compared with $332.8 million in the first quarter of 2009. Overall revenue for the first quarter rose 10 percent to $431.3 million compared with $392.3 million in the year-ago quarter.

’Our first quarter results demonstrate a good start to the year, with record performance across several key metrics, including strong bookings, revenue, earnings, and cash flow,’ said Neal Patterson, (left), Cerner chairman, CEO and co-founder. ’We are seeing initial demand related to the Health Information Technology for Economic and Clinical Health provisions in the American Recovery and Reinvestment Act of 2009, and expect this to build as we move through the year."


Cognizant Scoops Up Consulting Firm

Cognizant (2009 VAR500 rank 48) has acquired The PIPC Group, a global program management consulting firm based in London. The terms of the transaction were not disclosed by the company, but published reports said the transaction was worth $25 million pounds, or $35 million.

The PIPC deal follows in the footsteps of Cognizant's acquisition last year of Pepperweed Advisors, the IT consulting services division of U.S.-based Pepperweed Consulting.

PIPC's 200 professionals help leading global companies drive business transformation by providing industry-leading program management services, methods and tools. PIPC will extend and complement Cognizant’s existing project management and consulting capabilities and further Cognizant’s ability to provide integrated services in consulting, technology, and business process outsourcing.

’At a time when cyclical and secular pressures are driving clients to seek new performance thresholds, effective program management is essential to ensure measurable business outcomes. PIPC’s strategic program management offerings will strengthen our ability to manage increasingly complex global projects while expanding our geographic footprint, particularly in Australia, New Zealand and the UK,’ Francisco D’Souza, (left), Cognizant's president and CEO, said in a statement.

Insight Q1 Earnings Up

Net sales at Insight Enterprises (2009 VAR500 rank: 28) for the first quarter of 2010 increased 10 percent to $1.05 billion. Sales of hardware were strong in both North America and EMEA (Europe, Middle East and Asia). However, services declined 5 percent in North America, while jumping 24 percent in EMEA, compared with the first quarter of 2009.

"We are pleased with our financial performance in the first quarter, which resulted from better than expected sales and gross margin performance in North America across a leaner cost structure and in-line performance in our EMEA and Asia Pacific segments," stated Ken Lamneck, (left), president and CEO.

Deloitte Survey Looks At Talent Management

Recent research from Deloitte (2009 VAR500 rank: 10), discovered how senior executives were positioned to manage their talent pools during the economic recovery. Among the findings:

- Only 39 percent of executives surveyed have a talent plan aimed at driving innovation.

- Nearly half (46 percent) of those surveyed recall that voluntary turnover increased following the 2001-2002 recession. Nevertheless, only 35 percent have an updated retention plan in place to keep hold of talent as the recovery strengthens.

- Among employees surveyed, nearly one-in-three (30 percent) are actively working the job market and nearly half (49 percent) are at least considering leaving their current jobs.

- Among reasons for leaving current employers, surveyed employees ranked two non-financial factors among the top three: job security (36 percent), lack of career progress (27 percent) and lack of compensation increases (27 percent).

Cap Gemini Sees Signs of Recovery

Compared with the fourth quarter 2009, Cap Gemini (2009 VAR500 rank:7) saw a mixed bag of first quarter results. Consulting Services reported a marked increase (up 3.3 percent), while Local Professional Services (Sogeti) remained almost stable (down 0.9 percent). However, Outsourcing Services reported a slump of 3.3 percent. North America reported overall growth of 3 percent, mainly due to the marked recovery in IT investment in the financial services sector. Headcount overall rose one percent.

"The global economic crisis impacted our industry late on, but signs of a recovery in corporate investment are multiplying," said Paul Hermelin, (left), CEO. "Thanks to the five global service lines set up at the end of 2009, we are ideally placed to benefit from this recovery and enjoy a return to growth in the second half."

Patni: On the Block?

Is Narendra Patni, (left), -- one of the three founding brothers of Patni Computer Services (2009 VAR500 rank: 106) and widely considered one of the "fathers" of the Indian IT industry and offshore outsourcing -- considering selling a good chunk of his company to NTT Data (2009 VAR500 rank: 11)? Published reports suggest the Patni brothers want to sell a large part of their 46.5 percent holding, while private equity firm General Atlantic, will offer its 17.7 percent stake. A deal for a 51 percent stake is estimated to bring in between $981 million and $1 billion.