Hewlett-Packard Company, in an unprecedented move signed a multibillion dollar deal with Deutsche Bank AG (USA) on Tuesday. The decade long deal will help the ex-hardware maker earn billions, fetching sizeable profits for its investors.Over the ten years, Hewlett-Packard Company will be providing with all of the computing capacity to ensure the fulfillment of the bank’s need. It will also offer data storage besides hosting the bank’s operations.
In a joint announcement Hewlett-Packard Company and Deutsche Bank noted that the bank will retail control over its information security as well as the IT architecture. The bank further stated that it will outsource a majority of its wholesale ‘banking IT infrastructure’ to Hewlett-Packard Company (NYSE:HPQ) while retaining complete control of the retail operations.
Chief Operating Officer of Deutsche Bank AG, Henry Ritchotte, highlighted to the point that operational costs can be sustained by hiring a specialized outsource partner who will look into the bank’s IT and wholesale banking segment. Henry Ritchotte noted, the partnership will bear rewards by allowing the bank to work on its core capabilities, and there would be improvement in the timelines by whichnewer products would be launched.
The bank has earlier worked with IBM to manage its German retail banking operations. IBM was also involved in running branch network, which are run as Postbank, in Germany. In a scenario where the bank is continuously falling short of its profit targets,the outsourcing partnership is a possible restructuring route to bring invalued-added growth for the bank.