NEC, HP tie-up on computer services

TOKYO: Hewlett-Packard Co and Japanese electronics conglomerate NEC Corp said they will jointly provide computer services to companies in China, Japan and the United States.

"We're taking the HP-NEC partnership one step further," Hewlett-Packard Chief Executive Carly Fiorina told a news conference. NEC and HP are already cooperating in so-called "mission critical" systems for banks and other companies that cannot afford to have their systems fail. The two said on Thursday they would set up a joint marketing team in January.

"We may form joint ventures around individual customer opportunities," Fiorina said, but played down suggestions that a merger of operations with NEC was in the cards. "Right now we're taking it one step at a time," she said.

NEC Senior Vice President Toshiro Kawamura said his company and HP hoped to share investment costs for developing technologies needed to provide outsourcing services. NEC said it hopes the alliance will help it to double its revenues from the outsourcing business within three years to 200 billion yen ($1.62 billion).

The Japanese conglomerate, also Japan's biggest maker of PCs and telecom equipment, currently books around 10 percent of its total systems integration revenues through its outsourcing businesses. It will also look to increase business outside of Japan, which currently accounts for 90 percent of outsourcing revenues, Kawamura said.

Shares in NEC were up 0.65 percent at 463 yen at 0511 GMT, while the key Nikkei average was down 0.14 percent.

($1=123.63 yen)

© Reuters