ABB, IBM sign AU$57 million infrastructure services contract

ABB, IBM sign AU $57 million infrastructure services contract

IBM has signed an eight year AU$57 million contract with ABB Australia and New Zealand to provide IT services and support.

IBM Global Services Australia and New Zealand will provide the power and automation technologies supplier with IT infrastructure management and support, and e-business hosting services to ABB. The contract will start 1 January, 2005.

In 2003, ABB signed a 10-year, US$1.1 billion infrastructure outsourcing contract with IBM Global Services covering Europe and North America. The new contract sees the extension of the global relationship to Australia and New Zealand, which is expected to provide ABB with a solid base for its IT infrastructure in Asia Pacific.

ABB corporate marketing communications manager Diane Leonard told ZDNet Australia that the company previously undertook the tasks using in-house staff. The decision to go with IBM was based mainly on the commercial knowledge gained by the vendor during its work with ABB's Europe and North American branches from 2003.

Under the local contract, IBM Global Services will focus on the delivery of desktop, server and network management to ABB. IBM will migrate 40 of ABB's 110 servers to an e-business hosting environment at an IBM data centre in Sydney. This will allow ABB to access processing power and storage capacity on demand across the region and will provide improved stability and security to its infrastructure.

The contract also includes server consolidation, helpdesk services and disaster recovery services. IBM will support more than 1500 PCs across 42 locations in Australia and 14 locations in New Zealand. As part of the agreement, 19 ABB staff will move to IBM.

John Gaskell, country manager for ABB Australia and New Zealand, said that the deal is a "long-term relationship that is part of a global strategy to improve service levels, focus on our core business, reduce costs and establish a greater level of consistency amongst our worldwide divisions".

Gaskell added that the international relationship between the two companies will help the local transition run smoothly.

"By expanding our relationship to this market, ABB will benefit from receiving the same service levels in all markets and sharing best practices across our global operations," said Gaskell.

Brendon Riley, general manager of IBM Global Services Australia and New Zealand, said that the deal will allow ABB to have the ability to "quickly scale its infrastructure and staff resources on demand so it can respond more rapidly to customer demands and growth opportunities, and reduce its risk".

Leonard said no one would be retrenched as a result of the deal -- in fact, 19 staff from Australia and 2 from New Zealand would be taken on board by IBM as part of the deal.

She added that ABB could not comment on exact operational cost reductions but said that they would be "substantial".