Electricity and gas utility E.ON’s outsourcing deal with HP has been confirmed as having a value of $1.4 billion (£892 million).

The deal, which will run for five years, covers the management of data centres and PCs. It was described by analysts at TechMarketView as a "rare" megadeal in the current economic climate.

E.ON has also outsourced network management to T-Systems. The value of that deal has not been announced, but it is thought to be approximately £500 million.

The deals are part of the utility’s ‘PerformToWin’ strategy, which is aimed at improving processes. HP will support E.ON’s data centres and PCs, while T-Systems runs networking.

The utility will work with HP to improve operational efficiency, with the IT supplier managing data centres and workplace services for 80,000 employees. HP will also act as IT integrator.

HP already supplies hardware, support services and managed print services for E.ON.

The deal will also see will also see HP deploy its hybrid cloud model, Instant-On Enterprise, according to TechMarketView research director John O'Brien. He said the model is likely to be run "as a private cloud and to include the use of HP’s infrastructure and software-as-a-service".

Around 1,100 E.ON staff will move to HP and around 300 to T-Systems. The 2,700 remaining in E.ON’s IT department will continue to decide IT strategy, and run applications, security and the main power station control systems.

Edgar Aschenbrenner, chief information officer at E.ON, said the company needed “consistent, innovative and agile IT services”.

E.ON is "one of the first major energy companies to outsource its entire IT infrastructure", O'Brien said.

"Energy companies are under increasing pressure to cut costs and transform their IT estates as they grapple to take on the challenges of smart metering roll outs," he added. "So the deal could well point towards further outsourcing to come among the big energy providers."