News

posted on 13 May 2008 07:55

HP is reportedly buying BT's 24 British datacenters for $2.9 billion whilst BT will extend its management of HP's European voice and data networks out to the rest of the world. The deal has yet to be finalized

BT is the leading UK telecommunications provider and used to be called British Telecom. Although it is selling the 24 datacenters to HP it will sign a ten year contract to continue using them. In effect this is a BT datacenter outsourcing deal  to HP and an HP network outsourcing deal to BT.

HP, which already manages BT's IT infrastructure in the UK, will gain BT's server farm and data storage facilities there and take on 400 BT employeers. The datacentres store many, many terabytes of customer's corporate data, and the customer demand for such remote data storage 'in the cloud' has been growing exponentially.

The BT datacenters have a good reputation. In October last year  BT Global Services featured in the Visionary Quadrant in Gartner's Magic Quadrant for Data Center Outsourcing Services, Western Europe, Q4/2007.

The aim of the deal for BT is, apparently, to move its data storage business to HP and concentrate on communications and networking as a way of making its in-house Global Services business more profitable.

BT and HP have been jointly bidding or cross-supporting bids for major contracts with customers, finding that a combined IT and communications approach pays dividends. Now they are getting even closer together. Which begs the question; why?

The two have denied that the end game result is a merger.

HP has a great deal of solid in-house experience of consolidating datacenters. There is a strong possibility that BT's 24 may well be consolidated into fewer but much bigger datacenters. This deal may also indicate that HP has serious cloud computing ambitions that have not yet been revealed.

Separately HP is in acquisition talks with EDS to buy that world-wide IT services group for around $13 billion. HP is shaping up to be an IT hardware, software, systems, printing and services colossus that could substantially exceed IBM in size.

^{[Paul Roberts, news editor.]}