Dell, IBM add $6B to their services deal

NEW YORK -- Dell Computer Corp.,the world's No. 2 personal computer maker, and IBM Corp.

NEW YORK -- Dell Computer Corp., the world's No. 2 personal computer maker, and IBM Corp., the No. 3 PC maker and largest computer services provider, on Monday said they had agreed to a new $6 billion deal in which IBM will become a key supplier of computer services to Dell corporate customers.

The deal marks an expansion of a $16 billion pact under which IBM (NYSE:IBM) sells key technology components such as data storage disks and computer chips to Dell (Nasdaq:DELL) as part of a bid to expand the use of IBM technology beyond its own computer products.

The $22 billion technology components and services deal is the largest alliance in the history of the industry. Like the previous component supply agreement, the $6 billion expansion deal runs for seven years. Additional terms were not disclosed.

Early next year, Dell said it will start offering its U.S. corporate, government and education customers a range of installation and on-site warranty services from IBM Global Services for Dell's desktops, notebooks, workstations, network servers and data-storage products. Dell plans to extend the IBM services deal to international markets beginning next year.

The agreement formalizes and expands the scope of a preexisting services relationship between the two companies, they said in a statement. Dell said it will continue to offer customers its own set of computer services as well as those from Unisys Corp. and Getronics NV's Wang Global unit, two other key services suppliers to Dell.

Shares of IBM were up $1 to $126 on the New York Stock Exchange (NYSE). Dell was up $1.19 to $44.875 on the Nasdaq stock market. Shares of Unisys swelled $1.625 to $44.75 on the NYSE, but Getronics dropped 1.39 percent, to 49.75 euros from its 50.45 closing price on Friday on the Amsterdam stock market.