IBM, CEMEX ink $1B deal for outsourced IT services

IBM has inked a $1 billion deal with one of the world's largest cement manufacturers as it continues to present how emerging markets are core to its growth strategy.

IBM has just inked a new 10-year agreement with global cement manufacturer CEMEX to upgrade CEMEX’s current back-office management and IT services.

Some of those services that IBM will be providing include solutions for finance and accounting, human resource back-office services, application development, and maintenance services.

The deal is worth $1 billion, and CEMEX is expecting to generate up to $90 million in annual recurring savings -- or 40 percent in cost reductions. CEMEX is touted as the third-largest cement manufacturer in the world with operations in more than 50 countries.

IBM says that the deal represents how the world's largest companies continue to save billions on IT management with outsourcing.

CEMEX is also hoping the partnership will enable the company to be more competitive by allowing for more effective management and better customer service.

CEMEX chairman and CEO Lorenzo H. Zambrano explained further in prepared remarks, citing that "this agreement with IBM will enable CEMEX to focus on its core businesses of cement, ready-mix concrete, and aggregates; improve its financial position; and respond more quickly to changing market need.

For IBM, the deal with CEMEX represents a few things -- but mainly how IBM is working to present itself as the provider for solutions and platforms that can manage complex global transitions.

Similarly, it shows how emerging markets are essential to IBM's growth strategy as the Silicon Valley giant posits that the technology infrastructures of emerging countries far exceed that of developed countries, forcing increased global competition.