HP loses Daimler Chrysler business

IT SEEMS that while the Bank of Ireland was busy tying the knot with HP in another part of the world Daimler-Chrysler was filing for divorce, or so say two German sources that we hope we are translating correctly.

In February of this year Daimler-Chrysler announced a 500 million euro five-year outsourcing contract with Hewlett-Packard. Under the agreement HP would take over the procurement and management of all desktop computers, notebooks and network components for D-C worldwide, and in particular Daimler-Chrysler's 150,000 desktop systems were to be standardised.

After just nine months and what Daimler-Chrysler describe as a "sobering experiences in the pilot phase" they are now in negotiation to cancel the contract so they might perform the standardisation themselves.

Computerwoche says with understatement, "For Hewlett-Packard the decision of the DaimlerChrysler management means a bitter setback in the hard-fought IT service market."

Dissent has been brewing since June with Daimler-Chrysler employees claiming the HP's performance left much to be desired but D-C also being blamed for changing their requirements and having difficulties with project management, so much so that D-C's IT chief is under pressure.

According to sources within Daimler-Chrysler, HP is seeking between 10 and 15 million euros for costs and a further "several million" as compensation. All up the "sobering experience" looks like costing Daimler-Chrysler about 20 million euro.

In spite of the problems it appears that HP will continue to be a partner of Daimler-Chrysler on other projects.

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