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GM contract would benefit Cisco

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CIOL Bureau
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NEW YORK: Cisco Systems Inc. would "benefit greatly" from a $15 billion outsourcing contract that General Motors Corp. is expected to award this month, a Merrill Lynch analyst said on Tuesday.

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Analyst Tal Liani said the five-year contract could go to Electronic Data Systems Corp., or International Business Machines Corp.

"We believe that Cisco and EDS have been working closely on (a proposal) for 12-18 months and expect Cisco to benefit greatly should EDS win the business," Liani wrote in a note to investors.

GM currently gives EDS a little under $2 billion a year to handle its back-office technology operations, spokesman Kevin Lightfoot said. That contract expires in June and EDS is competing to win a new contract, he said.

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Lightfoot said Cisco is one of the company's partners, but declined to say whether Cisco is working with EDS on the GM contract.

A Cisco spokeswoman also declined to comment. GM officials could not be immediately reached for comment.

The winner would be responsible for upgrading GM's information technology and network infrastructure, Liani said.

Liani said Cisco could bring in $40 million in revenue "simply for upgrading" GM's digital phone service. It also could score additional revenue from upgrading GM's routers and ethernet switches that direct data traffic, he said.

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