How the recently announced “spin-merger” between HPE’s spun-off enterprise services unit and CSC to create a $26 billion global services giant (the third largest in the U.S) will actually shake out once its completed next spring is uncertain. What is clear is that the two service businesses had been struggling for some time.
“Both these companies have had a torrid time in IT services the last five years,” says Jamie Snowden, executive vice president of research operations for outsourcing analyst and consulting firm HfS Research, noting that CSC’s revenues had plummeted from $16 billion in 2010 to $12 billion in 2015. “Both firms outsourcing order books were targeted by offshore companies; they lost a number of deals and were wrong-footed as clients wanted to move to more asset-light outsourcing and cloud.”
