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Digital Wins $150 Million Contract From Canadian Utility

October 27, 1992

MAYNARD, Mass. (AP) _ Digital Equipment Corp. has been awarded a five-year, $150 million contract to run computers at a Canadian utility, the company said Tuesday.

The struggling computer maker will provide data center, desktop and consulting services to TransAlta Utilities of Calgary as part of the agreement, Digital spokesman Jeff Bartman said.

The deal falls into a new business market called ″outsourcing,″ in which corporations hire other companies to run internal systems, Bartman said.

″Customers want to become more efficient,″ he said. ″They want to focus on what they do best. So they turn over some of their internal functions to other companies.

″These are the kinds of contracts that will help us return to profitability.″

Earlier this month, Digital trimmed severance pay for idled employees in a move designed to save money as the company lays off up to 25,000 workers over the next two years.

Two weeks ago, Digital announced it lost $260.5 million in its most recent quarter.

At TransAlta, Digital will be running computers that handle plant maintenance, warehouse management, accounting and customer billing.

″Using Digital systems and services gets us both the technology and the expertise needed to operate effectively in a competitive market,″ Ron Bergen, vice president of administration for TransAlta, said in a statement.

Digital will manage four of its VAX 9000 mainframe systems at TransAlta, according to Bartman. TransAlta has also installed Digital’s ALL-IN-1 integrated office automation system, which includes an electronic mail network of about 3,000 users.

Founded as Calgary Power in 1909, TransAlta provides more than 75 million kilowatt hours of power daily to customers in an area of more than 127,000 square miles.

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