Virginia-based software major Computer Sciences Corp. (CSC) will provide one of its cloud-based services to an Australian wealth management company called AMP.
AMP, a leading wealth management service provider in Australia and New Zealand, supplies retail and corporate superannuation as well as retirement income products.
As per the agreement, CSC will provide AMP with its Collaborative Online Services (COS), which is basically its cloud-based email and collaboration solution. AMP is expected to use the solution to form a new cloud-based service for its Australian customers. CSC will host the COS locally in an Australian data center, which works on the prevailing virtual computing platform supported by technologies from VMware Inc. (VMW), Cisco Systems Inc. (CSCO) and EMC Corp. (EMC).
CSC’s private COS solution is easy to deploy and provides users with improved e-mail, instant messaging and team collaboration systems, which are particularly useful for teamwork among people from different disciplines. The service has been upgraded with product suites such as Exchange, Office Communication Server and SharePoint from Microsoft Corp. (MSFT).
Financial details of the deal were not published. Hence, we are unable to gauge the economic benefits arising from it. However, we are encouraged by CSC’s focus on cloud-based services, since we believe that both new and existing clients are likely to move further in that direction.
Considering the market dynamics, CSC has been developing its cloud portfolio, which should enable further customer wins.
Just recently, CSC launched a new cloud solution, CloudProtection, which will protect clients’ e-mail and Web systems. The solution is the combined effort of CSC and Symantec Corp. (SYMC), for easy deployment within organizations to facilitate round-the-clock networking security.
Apart from this, we are encouraged by CSC’s solid fourth-quarter results and upbeat outlook for fiscal 2011. Of course, quarterly performance is tempered by the intense competition in the IT and cloud computing space from players such as Accenture Inc. (ACN) and Hewlett-Packard Co. (HPQ) are threats. However, steady flow of new businesses, especially in the government vertical, enhanced product portfolios and expansion of its operations in new markets are positives.
We currently have a short-term Zacks #2 Rank (Buy) rating on CSC shares.
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