Kyndryl and Apollo Global linked to bid for DXC Technology DXC Technology, the beleaguered tech services provider that emerged from the alliance between HPE Enterprise Services and CSC then lost billions in revenue, is again reportedly the subject of takeover talks. At the time of the merger in 2017, The Reg described the union as two struggling businesses – which had both suffered at …
"An earlier one from the '80s described as "based on the principle that two stones tied together will float"."
I obviously missed that at the time, forty years later I've caught up and it made me chuckle.
You do have to wonder on the logic here - it can't be economies of scale, as with 130k staff, DXC is easily big enough to do all it's internal machinations at scale, and Kyndryl have 90k employees, so the same is true for them. There will be some savings (single board, brand, HQ) but those are nowhere big enough to cover the $4bn that Kyndryl want to throw at this deal. I wonder if the logic is that the enduring customer bases overlap, and are mostly stick in the mud medium to large businesses that long ago outsourced their own ITO to IBM or Dell (as were) and won't move to newer solutions out of a mix of inertia and fear? Often the same outfits tied to expensive and ageing Sporacle ERPs and complicated and costly IT landscapes. Bang them together, sack 10,000 staff, and do an extra big ream out when the self-captive customer base renew.
Quite a few years ago I predicted that there would eventually be a consolidation of out of fashion IT services into a "MicroFocus for ITO"
Where all of the legacy systems customers who couldn't or wouldn't modernise would end up so those customers could be wrung dry for their stupidity.
Seems like Kyndryl are playing for that market.
I guess coming from IBM they know all about legacy and customer lock-in
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