Star EDS deal-maker a $25-billion-dollar man

By PETER GRIFFIN

In the classic David Mamet movie Glengarry Glen Ross, a tale about the pressures and politics of a cut-throat real estate office, the boss sets up a leaderboard for his salesmen - for the leader the prize is a new Cadillac; for the tail-enders, unemployment.

Michael Boustridge can probably relate to the story, except he is not selling real estate.

On his meteoric rise through the IT industry Boustridge has signed-off a staggering $25 billion in sales, mostly for IT services giant EDS.

For him, negotiating 10-figure IT outsourcing deals is just another day at the office - most recently it was the Bank of America deal at US$4.5 billion ($8.1 billion). Before that WorldCom at US$6.9 billion.

"It's a lot of dollars," says Boustridge with a grin.

Those figures probably make him the best New Zealand salesman in history. They have certainly made him the EDS golden boy.

It was his part in winning a $1.8 billion outsourcing deal with Telecom, back in 1999, as a sales executive at EDS New Zealand, that really launched him into the big league.

By January 2000, the boy from Feilding was in Plano, Texas, the deal-maker for the second-biggest IT company in the world.

Today he runs EDS' third-largest account - that's profit and loss responsibilities for a $1.2 billion-a-year contract spread across six countries. About 1000 staff work for him.

By comparison, EDS New Zealand has revenue of about $350 million a year.

On top of the operational role, Boustridge is chasing deals and is expected to generate billions of dollars worth of new business annually.

"This year I'm not going to do any really big deals - I'm good for about US$2.5 billion," he says. "There's a big international telco they want me to go after."

Boustridge is ranked among EDS' elite - the top 100 senior managers.

"It's like having [Air New Zealand chief] Ralph Norris' job but I also get to go and do what I love, developing billion-dollar opportunities," he says.

Boustridge is obviously a master of the art of selling, but the deals involve more than a slick pitch, he says.

"Anyone can be a salesman - go to your local car dealer for that. It's more about being a master of putting a deal together."

And that is seldom about putting the cheapest deal together.

"Anyone can try to win on price, but then some other contract will have to be won to pay for you.

"Actually, the lowest price doesn't often win."

Surrounding himself with a good team is vital, says Boustridge.

About 120 EDS New Zealanders worked with him on the 10-year Telecom deal. It remains the country's biggest IT outsourcing contract to date and was last year extended an extra two years.

Boustridge remembers the race against IBM to win the business - in particular, that final silent period when Telecom's board mulled over the deals it had been presented with.

"It's known as 'Death Valley', the two weeks before a deal is finalised - two weeks of hell," says Boustridge.

EDS was confident it had Telecom in the bag, but just to make sure, it played its trump card.

"The only thing left to do was to bring down the big-wigs."

EDS' then-chief executive Dick Brown paid a visit. Brown knew Telecom chairman Roderick Deane through Ameritech's shareholding in the telco. Brown sat on Ameritech's board. It may or may not have been the deal-clincher but Brown's personal input definitely helped.

The Telecom contract was typical of the type of deals he was urging his executives to go after - multi-year, billion-dollar contracts that would supply stable and long-term revenue for EDS.

In 1999, the year Boustridge caught Plano's attention with the Telecom contract, EDS notched up deals worth US$24.9 billion.

It had racked up billions more worth of long-term deals by the end of last year, when it shocked Wall St by warning that earnings would fall 80 per cent short of projections for the third quarter. The day after the announcement, EDS shares fell 53 per cent to US$17.20.

Boustridge imagines the experience of inking mega-deals could be compared to taking hard drugs - not that he has any experience of the latter.

"It's like heroin; it's a fix. It's an enormous high when you sell - but then you've got to do it again."

The activity on each deal comes in waves as shortlisted bidders for the work are slowly whittled down.

In the US, the usual suspects Boustridge goes up against are the biggest IT companies in the world: IBM, Hewlett-Packard, Computer Sciences, Unisys.

Boustridge studies the approach the other IT outsourcers take, even weighing up the strengths and weaknesses of the salespeople involved - something that has been hard for them to do in return as no one knew where Boustridge had sprung from.

"You build the deal like an architect would a house. The request for proposal goes out, you draw up the specifications, you go from six to four to two on the shortlist. I analyse my competitors to the nth degree."

The Bank of America deal took a mere eight months to put together. It saw EDS take responsibility for the huge bank's IT systems and communications network, spanning thousands of branches and overseas offices. A thousand staff transferred to EDS as part of the deal.

Importantly, the contract did not require large upfront spending for EDS, which soothed a highly critical market.

The WorldCom deal was inked in 2000, although its bankruptcy last July posed challenges for Boustridge.

"I learned a lot about bankruptcy," he says warily.

EDS renegotiated the WorldCom deal and was forced to take a writedown. But Boustridge says WorldCom continued to pay its bills throughout and the relationship with the restructured company, now known as McI, is in good shape.

Still, EDS has seen better days. The earnings and share price volatility took its toll on Brown, who bowed out last month with a US$35 million severance package.

"EDS is going through hard times," says Boustridge, "but every good corporation that goes through bad times is a stronger corporation in the good times."

He worked with Brown daily and is looking forward to working with new chief executive Michael Jordan

When a deal is being put together Boustridge can put in an 80-hour week, leaving little time for anything else. He rises at 4.30am, heads to the gym to lift weights, and arrives at work early. He leaves the office late.

At 40 years of age, he is single and childless. He admits he does not do much outside of work - not that he feels he has had to make any sacrifices to pursue his career.

"I chose what I wanted to do. I like America, and I can create substantial deals there. I can't be as creative [in New Zealand]."

He does get to Dallas regularly to watch the local rugby team play. And there is time for trips across the Texan plains in a tank-like Hummer vehicle - a gift from EDS for his excellent sales record.

At any opportunity for extended leave, he heads back to Auckland. His house perched high in the Waitakeres has stunning views of the city, and he has a powerful boat in the harbour.

Boustridge is better-paid than the top tier of NZ chief executives - the Theresa Gattungs and Craig Norgates. The healthy bonuses from mega-deals have made him a millionaire "many times over".

Not bad for someone who never finished university.

He joined IBM New Zealand as a billing analyst in 1983 and rose fast through the ranks.

Then it was on to Hitachi Data Systems in 1989, where he was a senior system engineer and later NZ sales manager. In his time there Hitachi profits grew 300 per cent and costs were cut 45 per cent.

EDS was a 25 per cent shareholder in Hitachi Data Systems in the mid-90s, and that relationship saw Boustridge shift across in 1996.

He has just signed on with EDS for a further three years. Beyond that he does not know what he will do.

"There's a lot more to achieve at EDS - I scrape at what we can do."

He could see himself returning to New Zealand to head a local firm.

Via email he stays in touch with a group of Kiwi executives spread throughout the world, kicking around ideas for commercial ventures.

"New Zealand could do that island model, in the same way the likes of Ireland has. We all feel there's great potential here," Boustridge says.

Meanwhile, he does his best to talk up the country to his colleagues in Plano, acting as a tourism bureau by steering his executive colleagues in our direction for their holidays.

Boustridge is back in New Zealand for his sister's wedding, which conveniently coincides with EDS' pitch for Fonterra's outsourcing contract - a Telecom-sized deal.

He has used his nationality as an asset in corporate America. He knows he is different to most of his colleagues - which ultimately allows him to get away with more.

"I don't want to be better than the Americans, but I feel I have more to prove."