Canadian Imperial Bank of Commerce and Hewlett-Packard & Co. are forming an outsourcing joint venture.
Their new company, Intria-HP, is to supply a range of technology services, including processing for electronic commerce, to banks and other companies.
CIBC already offers some outsourcing services. Its Intria Items Inc. venture with Fiserv Inc. specializes in item processing.
Intria-HP, whose formation awaits regulatory approval, would be headquartered in Toronto and initially employ 750.
"We are the only company we know that can provide an end-to-end solution for processing of financial-type transactions for both paper and electronic transactions," said Harriet Velazquez, president of Intria Corp. and senior vice president of the bank.
CIBC executives projected that Intria-HP will generate cumulative revenues of about $1 billion over the next four years. A substantial portion of this is expected to come from contracts with the parent bank itself.
Ms. Velazquez said the success of the two-year-old Intria Items - which processes about 20 million transactions daily - gave rise to the HP joint venture.
She declined to predict what portion of Intria-HP's business would come from the U.S. market. But experts fully expect that the venture will quickly try to land business south of the border.
Under its agreement with CIBC, Palo Alto, Calif.-based Hewlett-Packard will own 49% of Intria-HP.
Hewlett-Packard, which is the world's third-largest computer maker, gives the new venture potent sales and marketing expertise in the U.S. market.
"We will be targeting new accounts in both the Canadian market and the U.S. market," said Randy Ostojic, general manager of financial services for Hewlett-Packard. He added that the venture will focus on banks and corporations with large transaction volumes.
For Hewlett-Packard the joint venture offers "an instant and strong (information technology) operations presence in Canada," Mr. Ostojic said. From a pricing perspective, "there are some efficiencies to running a business in Canada that most people don't recognize," he added.
William Bradway, analyst at Meridien Research, Needham, Mass., noted that Intria Corp. is beginning to resemble the data processing operation of Milwaukee-based Marshall & Ilsley Corp. M&I Data Services Inc. is the largest bank-owned data processor in the United States.
"Over the last couple of years, CIBC has been trying to find partners who can become active in leveraging what it has developed on its own," Mr. Bradway said.
By teaming up with Hewlett-Packard, CIBC gains access to technologies that will help it build the type of robust services that can attract big customers, he said.
Hewlett-Packard gets access to a pool of large corporate customers through CIBC. "Hewlett-Packard is hungry to compete on a bigger playing field," Mr. Bradway said.
Dan Branda, who previously was chairman, president and chief executive officer of Hewlett-Packard's Canadian operations, will become president of Intria-HP.
The venture requires regulatory approval from the Office of the Superintendent of Financial Institutions, the Ottawa-based regulatory body. Approval is expected before yearend.