On Monday, an IBM spokesperson announced that Deutsche Telekom’s struggling IT services and consulting business T-Systems has entered an agreement with IBM Corp, to provide mainframe services. Existing customer contracts will not be affected by the arrangement, which is subject to standard approvals, the spokesman said in an emailed statement to Reuters. “T-Systems will continue to offer mainframe services, but will subsequently provide these services with IBM,” he said.
T-Systems declined to comment on the financial aspect of the arrangement but confirmed that the company was deepening its cooperation with IBM in mainframe services and would operate together from May.
The German business paper reckoned the T-Systems volume going to IBM will be worth around 800 Million pounds over the next 10 years.
ITZoom reports state that IBM paid 860 Million pounds for the business. However, T-Systems told The Register: “This is not a sale of the business segment. T-Systems will continue to offer the services in the market and supply them to the customers, while IBM will provide a share of the services.” As part of the deal, hundreds of T-systems employees will be moving to IBM.
Big Blue told Reuters: “IBM and T-Systems plan to enter into a services agreement in the field of mainframe services. Existing customer contracts will remain unaffected. T-Systems will continue to offer mainframe services, but will subsequently provide these services with IBM.” Big Blue will reportedly announce its Q4 financial results on the 22nd of January.
The move is the latest by American turnaround specialist Adel Al-Saleh, who took over at T-Systems after Deutsche Telekom was forced to book a big impairment charge against goodwill for the loss-making business. Al-Saleh announced plans last June to cut 10,000 jobs in a three-year drive to return to profitability.