ABB and IBM reach $1.1 billion agreement

ABB and IBM have reached a 10-year, $1.1 billion agreement to outsource close to 90 percent of ABB’s information systems infrastructure operations.

ABB and IBM have reached a 10-year agreement to outsource close to 90 percent of ABB’s information systems infrastructure operations, including the transfer to IBM of more than 1,200 employees.

The agreement is valued at $1.1 billion and forms part of ABB’s cost reduction strategy to focus on its core industrial businesses. Combined with pilot contracts signed in the fourth quarter of 2001 for approximately $600 million, the full value of IBM’s and ABB’s relationship will approach $1.7 billion over ten years.

IBM Global Services will take responsibility for the operation and support of information systems (IS) infrastructure in 14 countries in Europe and North America. The deal includes taking over the management of servers, operating systems, corporate networks, personal computers and help desks.

In addition to the 510 ABB employees already transferred under the Sweden and India pilots, the agreement will include the transfer of approximately 780 ABB employees to IBM. In most cases, this transfer of responsibilities will take place in September 2003. A small team will stay with ABB to oversee and co-ordinate activities with IBM.

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