Invensys, IBM in $1B outsourcing deal

Invensys PLC in London has outsourced IT operations in more than a dozen countries to IBM's Global Services Group in a transaction valued at US$1 billion over the next 10 years.

IBM will provide infrastructure server management, application maintenance, Web hosting, help desk and desktop support services for more than 29,000 desktops and more than 2,000 large servers in roughly 400 Invensys locations worldwide.

The transition to IBM managed services will begin immediately, said Harry Spellman, an IBM client executive. About 600 IT employees from Invensys will be transferred to IBM starting this May in the U.S and in June elsewhere.

The outsourcing arrangement is being driven by Invensys' efforts to improve IT efficiencies as part of a wide-ranging reorganization announced in February, Spellman said.

IBM will also deploy a team of technology experts from its research organization to explore ways in which Invensys can better leverage IT for competitive advantage, said Larry Lieberman, a program manager with IBM Research.

An IBM Research team composed of research and consulting experts with industry-specific expertise will work with a similar technical team from Invensys to look at areas where IT may be more effectively applied, Lieberman said.

Such "innovation teams" are fast becoming a standard component of large IBM contracts, Lieberman said.

In past engagements, such joint efforts have resulted in clients prototyping or deploying new applications such as Web services and supply chain integration systems based on leading-edge technologies, he said.

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