HOWZAT

So just how gloomy is it out there? “It depends on who you talk to,” said Barrault. “If you go to Dubai and talk to the bankers, they say it’s the best time ever.”

He is keen to play up BT’s geographic spread — the result of 29 acquisitions bought over the past four years at a cost of £1.5 billion — as one reason why it can prosper in a recession.

However, he reveals early internal scepticism about China. “My management forbade it,” he said. “I remember people saying to me three years ago, we don’t want you to go to China, and I went there.”

Barrault, whom Verwaayen recruited from his own former employer, Lucent, sank £35m into service-and-research centres in the Chinese cities of Dalian and Shanghai. Asia-Pacific still accounts for only 2% of Global Services’ sales, but it grew 70% last year.

Barrault thinks blue chips will step up their expansion into emerging markets if growth splutters to a halt at home. And then there are firms, such as Nationwide, the building society, a recent £160m contract win for BT, which will continue to outsource its networks.

Analysts think it is too early to say whether Global Services will be recession-proof. “The likes of Accenture are still reporting pretty decent results,” said one, “but on the other hand it may be quite easy in some of these contracts to defer spending until the following year.”

Barrault’s focus is also on extending maturing contracts as well as renegotiating work that does not make financial sense. The suspicion is that BT signed up to a number of loss-making contracts in the early days just to get critical mass. “When you are new in this business you have a tendency to say yes to everything and you don’t know what you’re exposing your company to,” Barrault said.

“The new contracts are much better for us, much less exposed on capital expenditure. I want my colleagues on the supply side to take the pain also.”

Insiders say Barrault’s style is reminiscent of Pierre Danon, another passionate Frenchman. Danon was the head of the BT Retail division who oversold the potential for his gadgets and underwhelmed board colleagues with empire-building plans before departing abruptly.

The difference is that Barrault is already delivering. When he came in, he cut managers’ bonuses and £400m in costs by trimming 24% of management roles and 10% out of the back office, realigning divisions so that each of his regional heads had an industry sector to take care of as well.

“We are animals, you know, we need to show that we have territory,” he said. “That is how humankind is.”

Now he wants to take an axe to the number of BT’s business partners — it has 600 global suppliers. That is good news for his biggest partners, including Accenture, Vodafone and Cisco, with whom Barrault wants closer links. Together, they are creating what he describes as an “ecosystem” — closer links modelled on the four-year alliance BT has with Hewlett-Packard.

“We are moving to becoming a business operator. We build and run the infrastructure that enables a business.”

That could lead to jobs being transferred between partners as BT shaves off what it regards as non-core activities, such as managing data centres, but builds up longer-term relationships with customers.

Barrault is conscious BT needs to practise what it preaches to clients. “It’s like saying I only drink water because it’s good for my health and then at home I drink as much as I can — wine, whatever.”

In the UK, BT is one of the main suppliers to the troubled NHS IT systems upgrade. Barrault is negotiating to replace Fujitsu on the southern England portion of the contract, but not at any price. Despite a bad press at home, governments, including Singapore and Hungary, want BT to do work for them.

Barrault envisages the day when governments have a single database of citizens, covering everything from health to tax. In the meantime, he would like people at home to recognise the progress that BT is making abroad. “We have the good sense of British entrepreneurship, even if we are led by a Frenchman,” he said. “It’s entente cordiale at its best.”

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