IBM inks another billion-dollar deal... with The Other Advertising Giant

Not Google, WPP - and $1.35bn buys it 7 years of cloudy IT services


IBM has announced another big outsourcing contract, nabbing a new deal with WPP, the world’s top advertising firm, for $1.25bn.

Big Blue has worked with the ad giant before, but this is a new services contract to run its global tech platform in the cloud over the next seven years.

The contract comes hot on the heels of another $1.25bn deal to take over Lufthansa’s IT operations and a multibillion-dollar deal to provide infrastructure services to Dutch bank ABN Amro.

Bart Van den Daele, IBM’s GM for strategic outsourcing in Europe, told Reuters that these kinds of large contracts had dried up during the euro crisis, but things were picking back up.

“(There's) a new wave of these deals which is still continuing and we see it going forward,” he said.

He said that WPP actually signed up last quarter, but the services only went live recently. ABN Amro signed up in the fourth quarter and Lufthansa also signed this quarter, but IBM won’t take over until early next year.

The services wins have been made very public by IBM, following top and bottom line shrinkage in calendar Q3, which Big Blue CEO Ginni Rometty branded as disappointing.

"We are disappointed in our performance. We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry," she told analysts on a conference call in October.

The change she is referring to is the shift in tech consumptive models to the cloud, mobility, social and the ever growing need for security.

"We've got to reinvent ourselves like we've done in prior generations," the CEO added.

As world + dog is aware, IBM sold its underperforming x86 server business to Lenovo, and passed the microelectronics unit to Global Foundries. ®

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