IBM Clinches $660M Japan Outsourcing Deal

TOKYO (04/13/2000) - IBM Japan Corp. has won a 10-year deal to manage the information technology systems of Japan's Sumitomo Metal Industries Ltd., the Tokyo-based unit of the American computer giant said today.

The deal, which IBM values at US$660 million over the course of the contract, calls on the company to undertake a major reform of Sumitomo Metal's information systems and develop new e-business solutions, IBM said in a statement. Sumitomo Metal is one of the world's largest steel manufacturing companies.

IBM Global Services will be responsible for the development, maintenance and operation of Sumitomo Metal's existing steel production, sales, distribution and administration systems.

The contract, which commenced this month, will be managed by a new joint venture established by the two companies. IS Information System Co. Ltd. was established on April 1 and employs 420 people. It is owned 65 percent by IBM Japan, with Sumitomo Metal holding the remaining share.

For IBM, the deal marks the fourth major outsourcing deal the company has won in Japan this year. In early January, IBM said it had signed a 10-year outsourcing deal with Meiji Life Insurance, then in March it announced the signing of a six-year outsourcing deal with Japan Consumer Credit Services Co.

Ltd. [See "IBM Wins $370M, Six Year Japan Outsourcing Deal," March 27.]Earlier this month the company announced the awarding of a deal with Mitsui Mutual Life Insurance Co. worth an estimated $1 billion over the next ten years. [See "IBM Snags $1B Japan Deal," Apr. 5].

IBM Japan, in Tokyo, can be contacted by phone at +81-3-3586-1111 or online at http://www.ibm.co.jp/.

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