IBM lands US$194M TSYS services contract

IBM Corp. added another customer win Wednesday to its growing stable of multimillion dollar hardware, software and services contracts, signing a US$194 million, five-year deal to provide Total System Services Inc. (TSYS) with a wide range of IT products.

Located in Columbus, Georgia, TSYS's main business is processing financial transactions, including credit and debit card payments from 229 million cardholder accounts in 19 countries. For more than 20 years the company has primarily used IBM hardware, making IBM a natural partner when TSYS decided to update its IT system, TSYS spokesman Eric Bruner said.

The new contract calls for products from throughout IBM's portfolio, including IBM's eServer zSeries mainframe processors, TotalStorage 3494 Automated Tape Library and TotalStorage Enterprise Storage Server disk storage system, DB2 database software, Lotus Sametime collaboration software, Tivoli operations management software and WebSphere Application Server.

TSYS estimates that replacing its aging IBM mainframes with new zSeries mainframes will boost its processing speed by 20 percent, Bruner said. By 2006, TSYS expects its data centers to be handling 21 billion instructions per second, up from 14 billion instructions per second today.

TSYS isn't commenting on the cost savings it anticipates from the IBM contract, Bruner said.

While TSYS has always bought its hardware from IBM, the IBM software it will receive under the new contract will displace products from other vendors, including software from Computer Associates International Inc. and Compuware Corp., Bruner said. TSYS had no problems with those products, but sees the new contract as a chance to streamline its technology, he said.

The new software implementations are scheduled to be mostly finished by early 2003. The pain threshold of replacing old software with new "probably won't be that high," Bruner said.

While IBM products will be behind most of TSYS's IT framework, the company won't exclusively use Big Blue's hardware and software.

"We've assembled a payment system that includes and integrates all of the world's leading payment technologies. In some cases, IBM has the superior solutions. But we'll still look at everything," Bruner said. Any changes the company makes because of the new contract will be transparent to customers, he added.

When TSYS's implementation is complete, the company will be one of IBM's 25 highest-capacity clients in the U.S., IBM said.

Other major IBM hardware, software and services deals announced in the past few months include a $4 billion, seven-year contract with American Express Co. and a $500 million contract with Nestle SA

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