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RealTime IT News

Nokia Dials in IBM for IT Services

IBM's Global Services arm has won an IT outsourcing contract from Nokia worth $247 million over five years.

Under terms of the deal, Big Blue will provide 'pay per use' PC help desk, call center and software support to the Helsinki, Finland, mobile phone giant.

Additionally, 430 people from the Helsinki, Finland, mobile phone giant will join IBM in 36 countries. The agreement still requires the approval of regulators.

Nokia, and other companies that award large outsourcing deals, are motivated by two main factors: achieving significant savings from to the shifting of IT staff off their payrolls; and the ability to focus remaining staff on projects central to its business, including research and development projects.

Laurie Armstrong, a Nokia spokeswoman, declined to comment on how much the IBM agreement will save the company over the life of the contract.

The deal comes after several collaborative projects between the companies, including an effort to secure business applications on mobile handsets, a spokeswoman for Armonk, N.Y.-based IBM said.

Also, yesterday IBM reported a $2.7 billion profit for the fourth quarter of 2003, in part, because of strong performance of its global services division. Hardware and middleware also made a strong showing.

IBM expects continued demand for its global services division, as enterprises and government agencies look to cut costs by outsourcing management of PCs, laptops and personal digital assistants. Previously, mainframes, servers and back-end equipment management made up the bulk of outsourcing work.

IBM competes for these lucrative, multi-year with Electronic Data Services , Hewlett-Packard and Computer Science Corp. , among others.

"We did evaluate other companies throughout this process, however are not disclosing those names," Nokia's Armstrong said. "IBM offers Nokia a solution that met our targets and business requirements. IBM is one of the leading companies in this area and is investing heavily in the services business."