Dec 29, 2002 (07:12 PM EST)
J.P. Morgan Chase Signs $5B Services Deal
Read the Original Article at InformationWeek
After lengthy negotiations, IBM has secured a $5 billion contract to manage information systems for financial-services company J.P. Morgan Chase & Co. Under terms of the seven-year outsourcing agreement, IBM Global Services will maintain the bulk of J.P. Morgan Chase's voice and data networks, as well as help-desk services, across numerous locations.
About 4,000 J.P. Morgan Chase IT staffers and contractors will transfer to IBM in the first half of next year as part of the deal.
IBM is selling the services on a utility basis. J.P. Morgan's cost will vary based on its use of IBM's computing resources. The bank issued a statement saying it expects the deal to help significantly reduce its IT costs.
To connect J.P. Morgan Chase's numerous computer systems, IBM will deploy its utility-management software--open-source middleware that can connect apps regardless of the platform on which they run.
Faced with a tough economic climate, a number of global financial-services companies are outsourcing in an effort to cut costs. Earlier this month, Deutsche Bank signed a $2.5 billion, 10-year contract with IBM Global Services. Also in December, EDS won multibillion-dollar services agreements with Bank of America and ABN Amro.