56-year-old tech giant Computer Sciences is cleaving itself into two public companies
(CSC) CSC CEO Mike Lawrie
CSC, the giant IT consulting company founded in 1959 is the latest huge, aging tech company to cleave itself into two.
CSC is best known for outsourcing contracts and working on huge government contracts. Those are the kind of expensive, multi-year projects that are going out of favor as companies look use cloud computing for more of their tech needs.
Revenues at the company have shrunk from $15.6 billion in 2011 to just under $12.2 billion in its fiscal year 2015, which it reported on Tuesday. For its fourth quarter, it posted a beat on profits and a miss on revenue.
So, it has decided to sever itself into companies, both publicly traded:
CSC Global Commercial, which will service Fortune 1,000, with $8.1 billion in FY 15 revenue, and over 1,000 customers (including 175 of the Fortune 500) and 51,000 employees and 34 delivery centers globally.
CSC U.S. Public Sector, focused on government work, with $4.1 billion in FY and employs 14,000 people, including 3,500 U.S. military veterans.
Breaking up is a huge trend among older enterprise IT players as they face an onslaught of up and coming startups birthing faster, cheaper tech, and often backed by hundreds of millions of dollars in venture capital.
Other companies splitting themselves include eBay/PayPal, Symantec, and Hewlett-Packard.
Valley venture capitalist superstar Marc Andreessen, who a former board member at eBay and is still on the board at at HP, predicted last fall that ALL giant tech companies 20-years-old will follow suit, either voluntarily breaking up or having activist investors march in and try to force them into it. The idea is they need to get smaller so they can respond faster to new markets.
With CSC, his prediction is coming ever more true.
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