Accenture plc (ACN) recently announced that it will provide information technology (IT) consulting and outsourcing services to the renowned travel operator Thomas Cook Group plc for 10 years. Per the deal terms, Accenture will offer its technology and services to maintain and support Thomas Cook’s entire technology infrastructure throughout Europe. The financial terms of the deal were not disclosed.
Accenture will bring Thomas Cook’s discrete European IT operations under a single operating network, through the development of flexible infrastructure. Apart from this, Accenture will provide support relating to service desk, data center, workspace, network and security services. The IT infrastructure will be built on cloud technology to aid faster implementation of the entire system. Post implementation, Thomas Cook will be able to achieve significant savings by way of reducing the number of IT suppliers and making profits through improved customer services.
To make the gigantic system operational, Accenture will be partnering with networking giant Cisco Systems Inc. (CSCO) and Lufthansa Systems. Cisco will provide networking capabilities such as VoIP, video, unified communications and collaboration. On the other hand, Lufthansa Systems will provide virtualization, automation and cloud-based services in the form of an infrastructure-as-a-service.
The agreement follows the success that Thomas Cook has achieved through Accenture’s support services in the U.K. and Germany. The travel company also extended the years of service for two contracts signed in 2007.
Accenture’s longstanding relationship with Thomas Cook is encouraging. Moreover, continuous deal wins by this IT services giant from different industrial sectors affirms its expertise. Among others, relationships with Pepco Holding Inc. (POM), a renowned utility company, CF Industries Holdings (a leading manufacturer and distributor of fertilizers), Anheuser-Busch InBev (BUD) and Banco Bilbao Vizcaya Argentaria S.A. (BBVA) are worth mentioning. The company’s insurance footprint, too, is worthy of mention.
We think that all these deals would drive Accenture’s revenue in the upcoming quarter. But we remain somewhat cautious on the effect of the strained spending environment and Accenture’s broad European exposure.
Currently, Accenture has a short-term Hold recommendation, denoted by the Zacks #3 Rank.
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