Sometime this month, if all goes according to plan, Culture Secretary Tessa Jowell will approve the BBC's proposal to sell its technology arm to Siemens for £2bn.

The move will be the culmination of nine 'intense' months of supplier selection for BBC chief technology officer John Varney, whose idea it was to outsource the BBC Technology subsidiary.

'We set out to do something that we knew would be very tight. From the moment we identified there was of the order of £100,000 per day to be saved, we had to act,' he told Computing.

'BBC Technology is a real success story, but it's hampered by the fact it belongs to a content organisation not a technology company, and our job is to invest in programme making and content, not technology.'

The sell-off is wide-ranging, and far more challenging than a conventional IT outsourcing deal.

The contract will include the usual aspect such as IT, business systems, application development, network servers, and telephony.

But Siemens will also take over much of the broadcast technology, including digital coding and multiplexing for BBC's digital services, satellite distribution, the London Media Gateway - a fibre ring in London which is used to broadcast content - and all the third-party business BBC Technology does with organisation such as the 3 mobile phone network, ESPN, DirecTV and National Public Radio in the US, plus the BBC's consultancy arm.

Varney decided to adopt the controversial strategy as a result of the enormous changes taking place in the broadcast industry.

'There is a transformation taking place that is bringing commodity technology to the programme-making process,' he says.

'For example, the next big landmark natural history series is called Planet Earth, the successor to Blue Planet. It has the same high programming standards, using high-definition production, but we are producing that on commodity technology - we are making it on Dell systems.'

Varney says the broadcast industry is about to go through the same level of change that the printing industry went through in the 1980s, as the old 'hot metal' presses were replaced by computerisation.

'We have a vision in the BBC of the whole process being digital by around 2010. That's pretty rapid if you think of the scale of the industry,' he says.

'That transformation in the print industry happened because the upstarts came along and said - we can do this differently. The BBC is saying: we are the world's largest public service broadcaster and one of the premier providers of digital content, we are going to do this first because we understand how important it is to our business to make this change.

'This will be a series of revolutionary steps. In each step, there will be no going back. It's not a big bang for the BBC. We can step back at the end and say: look how much has changed. But it's not about an overnight revolution.'

In recognition of the impending change, technology plays a vital role in the BBC's plan for renewal of its Royal Charter. The BBC of the future will not only use technology to improve its production process, but to change the way viewers watch its programmes.

'The trick is to make sure we recognise we are approaching a whole new world with multiple routes to market, rather than the single route we used to have,' says Varney.

'Our challenge is to make sure the architecture, infrastructure and the processes allow us to hit all these different routes to market - digital TV, broadband, narrowband, mobile - simultaneously and dynamically with the same content types.'

Varney believes that by the end of the decade, watching TV on demand on a home computer via broadband will be an accepted means of viewing. The popularity of the BBC's interactive coverage of the Olympic Games in Athens shows that consumers are open to new technology-enabled innovations - but the change has to happen gradually.

'Broadcast content consumers are quite conservative,' says Varney.

'There is huge ch ange in the consumer market, with devices such as mobile phones and Personal Video Recorders such as SkyPlus in the home, and broadband, but that's not a defined market shift. Most people still sit on their sofa and watch TV or drive their car and listen to radio. We have to be careful we don't get carried away with what technology can do, and deliver it to a non-receptive market.'

The shift to commodity technology means the TV industry is not far from a time when anyone with a digital camcorder and a PC can create and broadcast home-made programmes over broadband - the first pirate TV stations.

It's a challenge the BBC is ready for, says Varney.

'Sooner or later, an upstart will come along and destabilise large chunks of the business, and that's good,' he says.

'At the same time, the BBC's strength is the quality of its content. We get money from the licence fee and are privileged to turn it into TV and radio programming that everyone wants. We can be very challenging and develop new programming ideas, and new digital content ideas and new channels.

'The people that are much more threatened are commercial broadcasters. They have neither the money to afford to be different in the delivery of digital content, nor can they afford to be incredibly fragmented because it destroys the thing that makes them money.'

So the outsourcing of BBC Technology is just one part of a widespread change in broadcasting that will eventually affect all our lives. To many outside the BBC, the corporation is an old-fashioned organisation struggling to keep up with a fast-moving world.

But the UK's favourite broadcaster is actually a world leader in its use of technology, and is ready to take advantage of the opportunity it presents.

'The whole story about the way we plan to use commodity technology to make programmes needs explaining before people understand the enormity of it,' says Varney.

'When you consider we create something like 13Tb of content data a week, and we are talking about shifting that around a commodity network and storing it, you begin to see the scale of the challenge.

'Then talk about how that reaches the consumer, and how we will have the consumer reaching into the BBC and accessing that. You start to see a picture of an enormous, enterprise-wide production system for the BBC, but also something that touches every household as well, and that's an interesting thing to look at.'

BBC technology initiatives

* The BBC begin its first widespread use of live broadband internet broadcasting for coverage of the Olympic Games. Home internet users had access to more than 1,200 hours of live coverage, with five broadband streams broadcasting exclusive events as well as normal TV programming.

* The BBC has started a trial to test the viability of a commercial broadband TV service called interactive Media Player (iMP). More than 1,000 people are trialling the iMP service, allowing downloads of encrypted BBC programmes, such as EastEnders and Holby City, which can be viewed on a PC via a specialist application.

* BBC Worldwide is offering direct access via the internet to moving image clips from the BBC and CBS News archives. The video will be made available through a BBC Motion Gallery website featuring a core collection of some 10,000 moving images.

* The BBC plans to create an online archive of factual television content due for release this autumn. An advisory panel to help the BBC choose what content to place online has also been formed.