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Big Blue in Big Outsourcing Bid

Outsourcing deals worth more than $1 billion are icing on the cake after IBM officials announced the completion of acquisitions Wednesday that solidifies its push in the European transportation and logistics industry.

The Armonk, N.Y., IT giant acquired Maersk Data, the consulting arm of Danish container shipping company A.P. Moller - Maersk. IBM also acquired another subsidiary of the Denmark-based company, DMdata, an IT services company jointly owned by Moller-Maersk and Danske Bank, who merged their IT departments seven years ago.

The two outsourcing contracts also involve Moller-Maersk and Danske Bank and are part of IBM's push to deliver what they call Business Performance Transformation Services (BPTS) to not only the transportation and logistics industries, but the logistics arms of companies in a variety of other industries, as well.

"It was a way for us to significantly increase our business within the transportation industry, and it was a way for us also to increase our business specifically in Europe," said Dwayne Ingram, vice president of IBM's travel and transportation group. "You not only think about the transportation industry, but the transportation business within other industries -- like the manufacturing industry -- so this is a much broader play than just the travel industry."

Ingram said IBM was in the right place to make the acquisitions; Moller-Maersk's shipping business was growing fast and wanted to shed some subsidiaries outside its core business. Ingram and IBM officials would not divulge the details surrounding the acquisitions.

While Maersk Data's consulting practice finds its strength in the transportation and logistics industry, IBM's new purchase also caters to the public sector, health care, and food and agricultural industries in 111 countries.

DMdata, with its ties to Danske Bank, caters to IT services in the banking industry, but has contracts in the transportation, financial services, retail and public-sector industries. It will be used as the cornerstone to launch an On-Demand Delivery Center to serve clients in Europe, the Middle East and Africa.

BPTS is the company's vision for combining industry-specific knowledge with IT services to solve business operation problems through Web services; a $500 billion market opportunity, according to Sam Palmisano, IBM chairman and CEO, over and above the $1.2 trillion market in traditional IT spending.

"BPTS has to be viewed in terms of business outcomes realized by any individual client," said Lia Papa, an IBM spokesperson, in an e-mail statement. "It starts with new business designs; getting to that new model requires design coupled with infrastructure, global scale, technical prowess and a commitment to stand accountable for results."