New multiyear deals expand IBMs involvement in large-scale business IT projects to Indias Idea Cellular, Swedens Sony Ericsson and Spains Endesa. The agreements re-emphasize the role of IBMs Global Services in bolstering the companys bottom line even in the midst of an international downturn.IBM
announced Jan. 29 three multiyear agreements with global corporations to
provide infrastructure and IT services on a worldwide scope. The moves could
help bolster IBM
Global Services, the companys international business consulting and IT management
division, whose 2008 revenues of $9.6 billion were down 4 percent from 2007.
An eight-year agreement with Idea Cellular, signed in December, will have IBM
assisting the Indian telecom operator in several ways. After helping integrate,
migrate and transition applications from Spice Communications (a company
recently acquired by Idea Cellular) to the Idea Transformed Applications
platform, IBM will manage all operations and
services for Ideas service areas in Punjab and Karnataka, and migrate IT help
desk services to a centralized help desk based in Pune.
I think the cellular deal is exceptional, said Charles King, an analyst
with Pund-IT Research. The conventional wisdom is that Indian service
companies have been eating IBMs lunch, but
they went in there and signed an eight- year agreement.
A contributor toward IBM being able to
seal the deal could have been the companys focus on highly replicable
services, which require fewer bodies to tackle client problems and allows them
to price their services aggressively.
Itll be interesting to see if this is the first of a series,
King said. India
and China have
been two places where cellular service has been growing by leaps and bounds,
and [IBM] has shown that they can go in and
notch a big win.
A five-year agreement with Sony
Ericsson, signed in January, will have IBM
managing application maintenance and development for all of the companys
SAP applications worldwide.
IBM will also provide infrastructure and
IT solutions to Endesa, an energy company headquartered in Madrid
with interests in Latin America. The contract expands on
the two organizations 2003 agreement to manage Endesas IT infrastructure in Spain.
IBMs mission is to institute a global IT
model that promotes operational and energy efficiency while reducing costs, as
well as support Endesas global expansion initiatives.
In addition to managing the central IT platform used by Endesa employees, IBM
will manage the control systems behind the companys energy
operations.
Most service deals are at the three- to five-year level, King said. The
length of all three deals really grabbed me.