Zurich outsources desktops to IBM

As part of a 7-month-old drive to streamline and enhance its IT operations, insurance firm Zurich Financial Services has decided to outsource its front-end IT infrastructure to IBM Corp., the companies announced Wednesday.

IBM will manage about 65,000 "electronic workplaces," which include desktop PCs, laptop PCs, printers and software, a Zurich Financial spokeswoman said. A workplace can be used by one or several employees, and likewise an employee can use more than one workplace, she added. IBM will provide the services in five European countries, the U.S. and Canada. The deal also calls for the transfer of about 470 Zurich Financial IT employees to IBM.

Zurich Financial, based in Zurich, Switzerland, will pay IBM a monthly fee based on its volume of service usage, as opposed to agreeing to an upfront fee. This is an increasingly popular way of billing clients for services which has been adopted by several IT services providers including IBM, Hewlett-Packard Co. and Sun Microsystems Inc.

In May, Zurich Financial unveiled a new global IT strategy for lowering costs by managing IT in a centralized manner and consolidating and streamlining IT services throughout the company. It warned at the time that the new strategy could lead to a reduction of the IT staff. In July, Zurich Financial announced plans to consolidate two data centers in Europe into one. The new IT strategy is part of a broader plan to improve the company's profitability.

The Zurich Financial contract is among the first of its kind won by Armonk, New York-based IBM since it announced in November its push to sell desktop services through its new Workplace offering, which bundles a variety of IBM desktop outsourcing offerings.

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