Yesterday, Novell and Affiliated Computer Services, Inc. announced a strategic partnership to expand each company’s core technical capabilities and suite of services.
This partnership has two major components. The first is a go-to-market agreement where ACS will purchase approximately $30 million worth of Novell services and products over three years. The commitment in the first year alone is approximately $10 million. In turn, ACS will leverage Novell’s solutions as they provide services to their customers around the globe. These products and solutions will help provide the backbone of their ACS Management Platform, AMP, which they use to provide service delivery to their customers around the world. The second part of the agreement is for Novell to outsource certain infrastructure and application services components of our IS&T function to ACS. This is a five year agreement with an expected value of $135 million. Once the transition is completed, 156 Novell professionals in the IS&T department are expected to become ACS employees. No jobs will be lost as a result of the transition. This agreement will enable Novell to take advantage of the ACS best practices in running IT, generate cost savings, and allow us to focus on our core business of building and bringing to market the best possible solutions for our customers.
To provide some perspective, we first had discussions with ACS last fall when they selected our Novell identity platform as a key technology they could leverage as part of their service delivery model. ACS immediately saw the value of our solutions to help them reduce the cost, complexity and risk of IT environments. On top of that, we learned ACS has an important presence in the Salt Lake City, Utah area that aligns to our footprint. That set the stage for further discussions.
This strategic agreement with ACS is a tremendous opportunity for Novell. First, as a source of revenue given that ACS will take advantage of our technology and services, and second, as a way for us to benefit from the ACS best practices in IT services.