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Financial

EDS's $4.5B Optical Bandwagon

News of a 10-year, $4.5 billion contract between IT outsourcer Electronic Data Systems Corp. (EDS) and Bank of America Corp. involves optical networking gear and services -- and yes, it could actually result in dollars being spent on gear.

EDS has been picked by the bank to oversee its entire voice and data services infrastructure, including a "redesign... to optimize Bank of America's optical network," according to EDS's press release.

An EDS spokesman says the outsourcing company tested a range of networking products in preparing the Bank of America bid and will make final decisions on equipment to implement at the bank within the next month. Neither EDS nor the bank will say which vendors have been tested or which ones are currently part of Bank of America's networks, optical or otherwise.

Still, some names come to mind. Bank of America announced another 10-year agreement in October to buy wavelength services from Sprint Corp. (NYSE: FON) (see Wave Services: Is Growth for Real?). One of Sprint's optical suppliers is Ciena Corp. (Nasdaq: CIEN). Neither Sprint nor Ciena would comment on the EDS deal at press time.

The bank also has a $70 million, 10-year deal with Broadwing Inc. (NYSE: BRW), which the bank has said will work in tandem with Sprint to offer dark fiber and load-balancing alongside Sprint's services (see Bank of America Picks Broadwing). Broadwing has acknowledged using gear from Corvis Corp. (Nasdaq: CORV) for wavelength services. Broadwing also has announced that its network includes gear from Ciena and Nortel Networks Corp. (NYSE/Toronto: NT).

A Bank of America spokeswoman confirmed today that EDS will take over the supervision of the Sprint and Broadwing services, along with offerings from a range of other carriers.

Clearly, the jury's out on which specific vendors will continue to be part of Bank of America's network. But with $450 million annually to spend, it's likely EDS hasn't been lacking in pitches from the usual suspects. Not all of that money will be going to equipment. EDS says it's "all-inclusive," covering personnel costs (including 1,000 bank employees who will be moving over to work for EDS) and other service expenses.

— Mary Jander, Senior Editor, Light Reading
stuartb 12/4/2012 | 9:11:06 PM
re: EDS's $4.5B Optical Bandwagon have been in bed together for some time. My bet is that the vast majority of the LAN/WAN gear in this deal will be Cisco's.
mma 12/4/2012 | 9:11:05 PM
re: EDS's $4.5B Optical Bandwagon EDS and WorldCom have (had?) a strategic partnership. Some time back, EDS engaged WorldCom to provide its networking, and WorldCom engaged EDS to provide its data processing. Since then, when EDS has pitched an IT outsourcing deal to major clients, they have pitched WorldCom as their partner to do the networking parts.

The Bank of America outsourcing announcement is interesting because:
a) it appears to be an outsourcing of the networking parts of the BofA IT infrastructure, and
b) WorldCom is either not a part of the deal or their name is deliberately being kept out of the news.

Is WorldCom still EDS' strategic partner for networking?
BobbyMax 12/4/2012 | 9:11:00 PM
re: EDS's $4.5B Optical Bandwagon It is to be expected that the management of wavelength service will be provided by EDS. The other thing that has not yet been announced is the type of service: protected or unprotected. The traffic most probably would be made of ATM, IP, frame relay, and gigabit ethernet. The choice of Global research to provide seems to be good because of ts international presence.

It appears that there would be multiple service providers and multiple equipment vendor. The big challenge is interoperability of equipment from various vendors and be able to manage wavelength services from a common platform. WAvelength service is scalable so a big network of the size of Bank of America.

Wavelength Service was close to death at one pont. The deployment of wavelength service by Bank of America would help revitalize the service.
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