IBM wins $80 million Terra Lycos deal

IBM won a skirmish in its ongoing server wars with Sun Microsystems and Compaq Computer, announcing Thursday that it has signed a two-year deal worth close to US$80 million to supply Terra Lycos SA with a mix of Unix- and Intel-based servers.

As part of the deal, Terra Lycos will purchase IBM's pSeries and xSeries servers along with selected IBM server-based software, including its Tivoli enterprise-level management software, Websphere application server, and Lotus Notes.

The agreement also marks the beginning of a new relationship between the two companies as strategic technology partners. Besides joining IBM's Advanced e-Business Council, Terra Lycos will also work with IBM scientists in the company's research labs in Almaden, Calif., on new and emerging technologies and applications.

"I think they chose us because they wanted more than just a hardware supplier, they wanted a partner. They wanted someone who could bring a lot to the table to solve a range of problems as well as someone they could invest in for the future," said Mike Borman, vice president in charge of IBM's World Wide Web Server sales in White Plains, N.Y.

Terra Lycos, one of the largest Internet access providers in the world, operating out of 42 countries, plans to not purchase any more Sun servers. Instead, with IBM's help, the company will gradually integrate IBM's servers, which will serve to consolidate the existing workload now being carried by Sun and Compaq's Solaris and Tru64 environments over to AIX.

This will help Terra Lycos in accomplishing one of its long-term goals of reducing not just its number of servers, but data centers as well, officials from both companies said.

"I think this [deal] serves to create a powerful relationship between IBM and Terra Lycos, giving us a platform on which we can exchange technology and collaborate on strategic projects," said Joaquim Agut, chairman of Terra Lycos.

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