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DXC Technology
Company Profile

by Karen
Spring

Copyright 2020, Faulkner Information Services. All Rights
Reserved.

Docid: 00016024

Publication Date: 2001

Report Type: VENDOR

Preview

DXC Technology is the result of a merger between CSC (Computer
Sciences Corporation) and the Enterprise Services division of Hewlett Packard
Enterprise (HPE). The merger was completed in 2017 and the newly organized DXC
is aiming to be a provider of business transformation for clients through its IT
service offerings and relationships with strategic partners. DXC recently spun
off its US public sector business into a brand new company called Perspecta. This profile takes a look at
DXC’s main service offerings, latest news, and strategic focus.

Report Contents:

• Fast Facts
• Profile
• Strategy
• Product Lines
• Activity

Fast Facts

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Name: DXC Technology (DXC)
Headquarters
1775 Tysons Blvd.
Tysons, VA USA 22102
Tel: (703) 245-9675
Web: https://www.dxc.technology/
Type of Vendor: Consulting and IT Outsourcing Services
Founded: 1959 (as CSC)
Service Areas: Global
Stock Symbol: DXC

---

Profile

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DXC Technology was created out of the spin-off of the Enterprise
Services division of Hewlett Packard Enterprise (HPE) and the merger of Computer
Sciences Corporation (CSC) with a wholly owned subsidiary of DXC. This event was
completed in April 2017. In October of that year, DXC announced that it
would spin off its US public sector business and combine it with Vencore
Holdings and KeyPoint Government Solutions to form an independent, separate
company called Perspecta. That spin-off was finalized in 2018. 

DXC is a leading global provider of technology-enabled
products, services, and outsourcing through two primary lines of business:
Global Business Services (GBS) and Global Infrastructure Services (GIS). CSC’s offerings include application
services, analytics, consulting, cloud and platform services, cybersecurity, mobility solutions,
business process services, and industry software.

Headquartered in Tysons, Virginia, with major offices in Australia, Asia, and Europe,
DXC has approximately 130,000 employees serving 6,000 clients in more than 70 countries.

History & Milestone Events

Major events in DXC’s history include the following:

• 1959 – CSC was founded by Roy Nutt and Fletcher Jones in El Segundo,
  California. The company’s main business was developing software for manufacturers.

• 1962 – Electronic Data Systems (EDS) is founded by Ross Perot. EDS
  grows into an IT outsourcing company.

• 1963 – Celebrated its initial public offering, becoming the first software
  company to go public.

• 1964 – Recorded annual revenues of $4 million.
• 1960s – Bought two IT divisions, which it managed for the Defense Communications Agency.
• 1966 – Signed a $5.5 million contract to support NASA’s computation laboratory.
• 1968 – Reported yearly sales of just over $53 million.
• 1969 – Cancelled a planned merger with Western Union.
• 1972 – William Hoover replaced Fletcher Jones, who died in a plane crash, as chairman and CEO.
  Under Hoover, CSC transitioned itself into a systems integrator.

• 1980s – Diversified in an attempt to move from being primarily a federal supplier to
  becoming a provider of services to private-sector companies, as well.

• 1995 – Announced William Hoover’s resignation as CEO. He was succeeded by president and COO
  Van Honeycutt. Acquired German computer services firm Ploenzke.

• 1996 – Bought insurance services provider Continuum Company for $1.5 billion.
• 1998 – Reported Computer Associates’ offer to acquire the company for $9.8 billion,
  which spawned lawsuits between the respective CEOs. All suits were dismissed in federal court.
  Meanwhile, CSC purchased consultancies Informatica Group, Pergamon, SYS-AID, and the French arm
  of KPMG, Peat-Marwick.

• 1999 – Signed an 11-year, $1 billion agreement to handle the back-office operations
  of Enron’s energy services division. Acquired Nichols Research.

• 2000 – Acquired Mynd (formerly Policy Management Systems) for approximately $570
  million. Also that year, the company entered into two significant outsourcing deals
  – a
  seven-year, $3 billion deal with Nortel Networks, and a $1 billion outsourcing and application
  development agreement with AT&T.

• 2001 – Acquired InfoSer SpA.
• 2003 – Acquired federal government technology consultant DynCorp for
  $950 million.

• 2005 – Completed the sale of some DynCorp business units.
• 2006
  – Retained Goldman Sachs as its financial advisor in preparation for a potential
  sale of the company. The company later decided to not sell itself, instead launching a $2 billion stock
  repurchase program.

• 2008 – CSC bought First Consulting Group. Moved headquarters to
  Falls Church, Virginia from El Segundo, California. Changed name from Computer
  Sciences Corporation to CSC. Resolved probe into stock option grants by
  recording $68 million USD in expenses. Agreed to pay $1.37 million
  USD to settle claims that it received improper compensation from IT contracts
  with US government agencies. Hewlett Packard acquired EDS, later creating
  Hewlett Packard Enterprise (HPE).

• 2009 – CSC rebranded outsourcing unit as Managed Services
  Sector. Purchased BearingPoint operations in Brazil. Entered alliance with
  Microsoft for cloud computing.

• 2010 – Entered joint venture with Google to implement cloud
  computing system in Los Angeles, CA. Agreed to acquire life sciences regulatory software
  vendor Image Solutions and strategy consulting firm Bass & Company.
  Rumored to be a buyout target.

• 2011 – Acquired several companies, including iSOFT Group and Maricom
  Systems, to increase its presence in the healthcare IT sector. SEC opened
  investigations into CSC’s earnings reporting in Denmark and Austria.

• 2012 – CSC replaced president and CEO Michael Laphen with Mike Lawrie, an
  IT industry veteran who was CEO of British IT company Misys and had 27 years
  of previous experience at IBM. The company also lost major IT contract with UK’s
  National Health Service, which severely affected its reported earnings.

• 2014 – CSC aligned with HP and Allscripts to bid on a Department of
  Defense electronic health records-sharing contract that could be valued at
  upwards of $11 billion. Sources close to CSC say the company is looking at
  investors for a potential sale that could take the firm private.

• 2015 – Announced plans to spin off its North American public sector
  business into an independent company. The new entity is known as CSRA. Hewlett
  Packard splits into HP, Inc. and Hewlett Packard Enterprise. 

• 2016
  – CSC announced that it will merge with Hewlett Packard Enterprise’s
  Enterprise Services division. The combined company is expected to bring
  in $26 billion annually in revenues.

• 2017 – The merger between CSC
  and Hewlett Packard Enterprise’s Enterprise Services division is completed.
  The combined organization is named DXC Technology. Acquired Tribridge, an independent integrator of Microsoft Dynamics 365.

• 2018
  – In May, DXC separated its US public sector business with Vencore Holdings
  and KeyPoint Government Solutions. The result is the formation of a separate
  entity called Perspecta that began trading on the NYSE. DXC acquired
  argodesign, an Austin, TX-based product design consultancy; Molina Medicaid
  Solutions, a Medicaid management information systems business; System
  Partners, a provider of customer-centric offerings; Sable31, a Microsoft
  Dynamics 365 value-added reseller; eBECS, a Microsoft Gold Partner; and
  M-Power Solutions. 

• 2019 – DXC names Mike Salvino to serve as
  president and CEO, succeeding Mike Lawrie. The company acquired Virtual
  Clarity, an IT-as-a-Service transformation advisory service provider;
  Bluleader, an Australian consulting company that delivered customer experience
  products and services; Syscom, a ServiceNow partner; Luxoft, a digital
  strategy and software engineering firm; and the service business of EG A/S. A
  US District Court judge blocked DXC Technology and HPE from keeping their
  legal filings secret in an arbitration case in which HPE had to pay $666
  million to DXC. 

Strategy

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DXC Technology is positioning itself as an end-to-end IT services
organization and using strategic partnerships with other companies to develop
top-notch offerings that drive business transformation. In fact, it’s name –
which the company says is not an acronym – stands for its mission:
leading clients on digital transformation journeys. The X refers to the company
as being a force multiplier, which enables clients to embrace business
opportunities that result from evolving technologies. 

The company’s business strategy can be categorized into three pillars:

• Help clients advance their digital transformations by modernizing and
  simplifying mainstream IT to help fund digital initiatives..
• Invest in employees to nurture next-generation skills and leadership
  development.
• Deliver value by achieving results for clients and stakeholders. 

Strengths

By itself, CSC offered an extensive services portfolio, building on a
reputation for quality to preserve its sizable client base. CSC had cultivated a
steady revenue source, for example, by providing services to the US
government. It was considered a global services leader. With this background,
DXC Technology should not have any trouble remaining a major player in the
services market.

Since its inception in 2017, DXC Technology has nailed down strategic
partnerships with such well-known companies as Amazon Web Services, Dell
Technologies, Google Cloud, VMware, IBM, Oracle, SAP, and Microsoft. Together, with its partners,
DXC expects that it will be able to create new offerings and boost sales
potential.

The 2019 acquisition of Luxoft, a digital consultancy in Switzerland, will
help to strengthen DXC’s digital offerings. Former CEO Mike Lawrie said in
January 2019, prior to the acquisition, "Luxoft and DXC are highly
complementary, and our shared vision of digital transformation makes this
strategic combination a great fit for both organizations… The addition of
Luxoft accelerates DXC’s growth strategy as we equip the company to meet the
digital requirements of our clients today and in the future." 

Weaknesses

As a global IT services provider, DXC is in a very competitive landscape. It
is greatly challenged by other competitors including IBM and Accenture, who also
offer various IT services.

DXC faced several major court battles in 2019. Former executive vice
president Stephen Hilton accused DXC of breach of contract and sought $14.3
million in damages after Mike Lawrie, the CEO at the time, made changes to
vesting dates on Hilton’s stock options. Hilton was fired in 2018 after he made
comments to others about Lawrie’s lack of professionalism in regards to dealing
with other executives. Those comments eventually got back to Lawrie. The two
sides agreed to dismiss the suit in July 2019. 

Another suit involved a DXC contractor, Atlas. DXC Account General Manager,
Mark Angarola, hired Atlas contractors who he knew personally or were family
members. The suit alleges that "According to DXC, Angarola directed the
hiring of certain consultants and contractors who were friends and family of
Angarola and had those individuals submit fabricated time sheets and expenses to
Atlas for payment to DXC."¹ Angarola has denied the allegations.
DXC has said it will not pay the more than $3 million it owes Atlas.  

In a third case, US District Court Judge Valerie E. Caproni refused a request
from DXC and HPE to keep their legal filings private regarding a $666 million
arbitration award. This decision stems from a dispute between the two companies
following the formation of DXC in 2017. The actual details of the dispute have
not been made public but in an arbitration decision, HPE had to pay DXC $666
million in damages in the case. Caproni denied the request, calling the
justification for keeping all court filings "inadequate," and cited
the First Amendment.²

Outlook

In 2019, DXC tapped Mike Salvino to take over as its president and CEO. Mike
Lawrie, the company’s previous president, CEO, and chairman, has retired.
Salvino comes to DXC with more than three decades of experience in IT
leadership, including roles at Accenture and private equity firm Carrick Capital
Partners. 

Salvino announced in November that DXC would divest three of its businesses –
its US, state, and local health and human services business; its business
process services business; and its workplace and mobility business – to focus on
digital revenue growth. The three businesses together comprise about 25 percent
of DXC’s revenues.   

DXC separated from its US public sector business in May 2018.
"Separating our global commercial and USPS business, and combining it with
Vencore and KeyPoint, will accelerate transformation with two strategically
focused companies, each uniquely positioned to lead its market by prioritizing
the needs of its clients," Former CEO Mike Lawrie said in a statement at
that time. Vencore has
been a provider of engineering, security, and other IT services to the federal
government, while KeyPoint delivers investigative services to different
industries. 

Product Lines

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DXC is a leader of next-generation information technology services. The
vendor offers various business services and industry-specific solutions for
vertical markets. Table 1 details DXC’s service solutions.

Major Competitors

• Accenture: https://www.accenture.com/
• Booz Allen Hamilton: https://www.boozallencom/ 
  Capgemini: https://www.capgemini.com/
• IBM Global Services: https://www.ibm.com/services
• Unisys: https://www.unisys.com/

Activity

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Mergers, Acquisitions, and Divestitures

DXC Technology
has acquired Bluleader,
an Australian consulting firm that delivers CX (customer
experience) services. This transaction will bolster DXC’s SAP
practice – Oxygen – to “provide clients with integrated solutions
across the entire SAP Customer Experience portfolio.” No terms
were released.

(11/04/2019)

DXC Technology
revealed plans to acquire Syscom, a ServiceNow partner. This
purchase is designed to allow DXC to extend its security
operations and service-management scale and reach, in addition to
growing the company’s capabilities as a global ServiceNow
solutions provider.

(08/21/2019)

DXC Technology
completed the acquisition of Luxoft Holding. The purchase
of this digital strategy and software engineering company comes
Days after DXC announced that it received “final regulatory
approval” for the transaction. Luxoft will continue to be led by
Dmitry Loschinin, who will now report to Chair, President, and
CEO Mike Lawrie. Terms were not released.

(06/17/2019)

DXC Technology
revealed plans to acquire the service business of EG A/S, which functions as one
of the top integrators of Microsoft Dynamics 365 in
the Nordic region. This acquisition is expected to see the
combination of EG’s assets within DXC’s existing Eclipse
business. The transaction is expected to close in DXC’s fiscal
fourth quarter ending March 31, 2019. No terms were released.

(01/28/2019)

DXC Technology
and Luxoft signed an
agreement to acquire Luxoft. This transaction will see the
latter’s investors receive US$59 per share in cash, representing
a total equity value of about $2 billion. Luxoft provides digital
strategy consulting and engineering services for companies across
North America, Europe and the Asia Pacific region. The company’s
acquisition is expected to expand DXC’s ability to offer
end-to-end digital capabilities; services in insurance;
automotive industry offerings; cloud-based and security offerings
for connected auto services; and healthcare and life sciences
services.

(01/07/2019)

Alliances and Joint Ventures

DXC Technology‘s Luxoft and
LG are forming an automotive joint venture. This partnership
will work to advance the deployment – based on the webOS Auto
platform – of production-ready digital cockpit, in-vehicle
infotainment, rear-seat entertainment, and ride-hailing systems.
Luxoft will lead the deployment of webOS in the systems by
contributing its global delivery network and engineering
“at-scale” delivery organization.

(01/13/2020)

Microsoft and DXC Technology‘s Luxoft are expanding their
collaboration to focus on accelerating the delivery of connected
vehicle and mobility technology. In particular, Luxoft will
leverage Microsoft’s Connected Vehicle Platform to more easily
deliver “vehicle centric” products and services; offer features
such as advanced vehicle diagnostics, remote access and repair,
and preventative maintenance; and help collect usage data to
support vehicle engineering and improve manufacturing.

(01/02/2020)

DXC Technology
and VMWare have launched a
multi-cloud orchestration, automation, and governance service for
transforming managed-services delivery “across any cloud.” DXC’s
Managed Multi-Cloud Services, which are powered by VMware,
provide service-management, at-scale.

(11/05/2019)

DXC Technology
forged a strategic partnership with Google Cloud to focus on
helping to modernize mission-critical IT and integrate digital
technology on the Google Cloud Platform. This agreement will see
DXC launch centers of excellence for the Google Cloud Platform
and Google Cloud Artificial Intelligence (AI) to provide
“scalable and agile cloud-based digital platforms that leverage
advanced data analytics.”

(08/20/2019)

Microsoft and DXC Technology expanded
a strategic partnership to form the
Microsoft Azure Digital Transformation Practice. This worldwide
group specifically works to accelerate client migration to the
Azure public cloud, in turn helping improve efficiency and
agility. This joint practice is designed to help create and
execute public cloud strategy. DXC and Microsoft will co-invest
to develop products and services that are built for Azure, and
jointly go-to-market with sales, consulting, and solution
delivery teams that include DXC’s Azure professionals and
Microsoft architects and technical strategists. Further terms
were disclosed.

(07/11/2019)

DXC Technology
signed a 13+ year managed co-location services agreement with Credit Suisse
(USA). This partnership is expected to help DXC expand its
presence in data center co-location capabilities; it will also
acquire a data center from the firm. No terms were released.

(05/13/2019)

DXC Technology
signed an agreement to support BMW autonomous vehicle
development. This partnership focuses on technology development
via the High Performance D3 platform. The BMW Group High
Performance D3 platform supports autonomous vehicle
development, gathers massive amounts of road-travel data, and
collects, stores, and manages vehicle-sensor information, in
seconds, for faster autonomous drive-development cycles.

(04/08/2019)

Citrix Systems was
selected by Saab and DXC Technology to provide
its Workspace service. This deployment – which will run on DXC’s
MyWorkStyle offering – to allow Saab to serve up personalized
systems access, information, and tools for employees.

(01/15/2019)

Personnel and Organizational

DXC Technology announced that Vinod Bagal, its EVP of
Global Transformation, will also lead the Global Delivery
function, effective immediately. Bagal takes on the role from
SVP, Samson David, who will pursue other opportunities, and will
continue to report to President and CEO Mike Salvino.

(01/13/2020)

DXC Technology appointed Carla Christofferson as Chief Risk Officer. The former AECOM exec will report to President and CEO, Mike Salvino.

(01/07/2020)

DXC Technology
hired Steve Turpie as VP, Client Account Management, specifically
in the UKIMEA (UK, Ireland, Israel, the Middle East and Africa)
region. Turpie is a former senior exec with QBE Insurance Group
and Zurich Insurance Company, and also a former Accenture Senior Advisor.

(11/04/2019)

DXC Technology named former Accenture executive Vinod Bagal as EVP, Global Transformation. Bagal will, effective immediately, report to President and CEO, Mike Salvino.

(10/30/2019)

DXC Technology
appointed Kristin Slattery to the new position of VP, Corporate
Operations. Slattery – who is a former executive with Accenture – will be
responsible for “driving improvements in company performance,”
and will work to streamline processes, optimize operational
execution, and lead key cross-functional and cross-regional
initiatives.

(10/28/2019)

DXC Technology
announced a plan to create 1,200 new jobs at its Conway,
Arkansas location. The positions will center around healthcare
and life sciences, automotive, and security IT services, and come
as DXC looks to establish a Center of Excellence in the region.

(10/22/2019)

DXC Technology
named Mary Finch as EVP and Chief HR Officer, reporting to
President and CEO Mike Salvino. The executive joins DXC from
AECOM, and is also a former Accenture HR staff
member. Finch’s appointment is effective immediately.

(10/01/2019)

DXC Technology
opened a new global digital transformation center for developing
“high-impact” digital solutions in Australia and New Zealand. The
location will provide access to a collaborative environment that
will draw on DXC’s capabilities for digital transformation,
foster idea incubation, and work toward improving learning and
development.

(09/23/2019)

DXC Technology‘s
Board of Directors has elected Mike Salvino as President and CEO,
effective immediately. Salvino succeeds the retiring Mike Lawrie,
who has led DXC since its formation in 2017; he will also step
down as Chairman on December 31, 2019. Salvino most-recently
served as a Managing Director with Carrick Capital Partner, and
is also a former Group Chief Executive with Accenture.

(09/11/2019)

DXC Technology is opening an Innovation Center in London. This facility is expected to provide a collaborative environment to allow the company and its clients to develop “high-impact” digital technology.

(06/18/2019)

DXC Technology
inaugurated a Next Generation Security Operations Center (SOC)
in Kuala Lumpur, Malaysia . This facility will serve both
regional and global clients, helping to strengthen and enhance
enterprise security by integrating advanced security analytics
across IT and operational technology areas. The center will also
support DXC Intelligent Security Operations, in turn providing
expertise in advanced analytics, digital forensics,
investigations and incident response, and other tailored
solutions to protect the digital enterprise.

(04/16/2019)

Financials

DXC Technology
logged a 37 percent year-to-year decline in profits for the
fiscal 2020 first quarter ended June 30, 2019. Earnings totaled
$168 million, or $0.61 per share, compared to a fiscal 2019 first
quarter net income of $266 million, or $0.90 per share. This
quarter’s amount, it was noted, reflected restructuring,
separation, and integration costs, as well as amortization of
intangible assets. Revenues, meanwhile, were $4.9 billion, an
amount that is down by 8 percent from fiscal 2019 Q1 sales of
$5.3 billion.

(08/12/2019)

DXC Technology
logged steady year-to-year declines in company profits for both
the fiscal fourth-quarter and full-year periods ended March 31,
2019. DXC’s earnings included restructuring, transaction,
separation, and integration-related costs, amortization of
intangible assets, pension and OPEB (other post-employment
benefits) actuarial and settlement losses, and other adjustments
related to US tax reform. Q4 net income was $274 million, or
$1.01 per share, which is down by 51 percent from year-ago
quarterly profits of $560 million, or $1.93 per share.
Three-month revenues were $5.3 billion, an amount that is down by
5 percent from year-ago quarterly sales of $5.6 billion. For the
full-year period, earnings were $1.3 billion, or $4.47 per share,
an amount that is down by 28 percent from a year-ago, 12-month
net income of $1.8 billion, or $6.04 per share. Revenues were $21
billion, which is down by 5 percent, year to year, from sales of
$22 billion.

(06/03/2019)

DXC Technology
logged a year-to-year decline in profits for the fiscal 2019
third quarter ended December 31, 2018. Earnings were $462
million, or $1.66 per share, which is down by 4 percent from a
fiscal 2018 third quarter net income of $776 million, or $2.68
per share. These totals included $76 million in restructuring
costs, $107 million in transaction, separation, and
integration-related costs, and $134 million in “amortization of
acquired intangibles.” Revenues, meanwhile, were $5.2 billion,
which is down by 5 percent from fiscal 2018 third quarter sales
of $5.5 billion.

(02/11/2019)

Regulatory

DXC Technology
noted that it has received the regulatory approval needed to
complete its acquisition of Luxoft Holding, a global
digital strategy and engineering firm. This transaction – which
is expected to help strengthen DXC’s ability to design and deploy
“transformative” digital solutions – is now scheduled to close
“no later than June 30, 2019.” Terms were not announced.

(06/11/2019)

References

¹ O’Ryan Johnson. "3 Major DXC Technology Lawsuits that
Made Waves in 2019." CRN. October 23, 2019.

² Rick Whiting. "5 Companies that Had a Rough Week. CRN.
September 13, 2019.

About the Author 

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Karen M. Spring is a staff editor for Faulkner Information Services,
tracking high-tech industries, including network security, ERP, CRM, network
management, Internet security, and software tools. She writes regularly on
high-tech topics for publications in the k-12 and higher education industry.
Previously, Ms. Spring was a marketing specialist for two computer distributors,
working closely with such clients as 3Com, IBM, Okidata, Unisys, and Acer.

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