BT services arm eyes 'shared risk' approach

BT is bullish about the future of its IT business and claims to be "looking very carefully" at a shared risk model of providing organisations' communications and IT needs.

While deals such as those from the NHS - which cumulatively should bring in over £2bn over the next nine years - won't come along every quarter, the telco is seeing "a continuous run of serious and important deals… in the $50m to $100m range", said Andy Green, CEO, BT Global Services.

The company's recent healthy financial results are in no small way down to the contribution of Green's unit as revenues from more traditional areas have remained static or fallen in the face of competition. As well as providing communications and IT outsourcing services, the telco is now also in the business of guaranteeing the performance of individual applications, as recent contract wins have shown.

However, Green told silicon.com that BT Global Services is now "looking very closely" at a shared risk model of provision. This involves a service or infrastructure provider being paid according to a customer's direct business benefits. For example, a tour operator would pay by the increase in bookings made through a call centre rather than the uptime and performance of systems at the facility.

In May, airline industry provider Amadeus and HP - a BT partner - caused a stir when they embarked on such a 'usage-based' relationship.

Green said: "There is definitely innovation here and there are aspects of this kind of agreement already in some of what we do, for example with [City trading system] Crest and our Liverpool City Council contract."

While BT has proven successful so far with its ICT push, there is a question mark over which of its rivals may try to copy its approach.

While some already have similar approaches, for example Deutsche Telekom's T-Systems, US carriers AT&T and MCI were singled out by Green as telcos that "should do but haven't done yet".

He added: "Now is a great time to create a services business from a communications background."

To help develop his unit of BT, which is also a consumer of IT besides being a provider, BT Global Services last month appointed ex-Qwest executive Al-Noor Ramji as its CIO.