Although plans were first mentioned in May to have CSC split into two different companies, details of how the actual transaction was going to take place have only become public recently.
Government services to combine with SRA
The new government services group, which is scheduled to become separate from CSC later this year will combine with another government contractor in a deal that allows both companies to leverage their strengths to move the combined entity forward. Already this quarter, CSC has managed to use its agile cloud infrastructure and team acquired from Service Mesh to help it win a piece of a 1 billion dollar contract with the FAA.
Former Service Mesh CEO, Eric Pulier, was instrumental in putting together a technology business that was acquired by CSC for use in creating an infrastructure that underpins both their government and private sector business bids. He was also able to bring his team aboard at CSC and integrate them successfully into CSC’s infrastructure, helping to strengthen CSC’s hand at a time when the government business opportunities are slowing down.
SRA is a much smaller company, but they have the type of complementary structure that will allow them to replace some of CSC’s staff that stays with the private sector portion of CSC. The net result on the government side will be an entity that has greater reach and more experience in the government market place. As has been published, while many firms are technically qualified to bid and fulfill government contracts, very few are able to jump through the specific qualification and experience hoops that are set up for some contracts.
What will remain for private customers?
After the government contracts business separates and leaves, CSC’s IT unit will focus on performing duties for private businesses exclusively. With several decades in the business, the key for their success in the private marketplace is continuing to look around the corner at key technologies and processes that are on the horizon. They cannot afford to miss a purchase of the next Service Mesh if they want to stay relevant. Fortunately, their management has a history of competing globally against lower cost suppliers and winning. In addition, their last large contract win was done in conjunction with Microsoft and Amazon, which shows that although they are not the largest player in the market, they have the flexibility to team up with competitors in order to win contracts.