Canadian Railway Hitches Up with IBM’s IT

Continuing to benefit from a move towards outsourcing, IBM has won a deal to manage IT infrastructure for Canadian Pacific Railways (CPR) under a new seven-year, $154-million contract.

Big Blue is expected to handle servers, storage and emergency recovery for CPR, as well as providing technology from its Center for Transportation Innovation in Boulder, Colo.

CPR’s mainframe and data centers in Calgary and Toronto will migrate to IBM facilities in the two cities. About 100 CPR IT workers will move to comparable jobs with IBM as a result of the deal.

“(This relationship) reflects a trend in Canada and the worldwide marketplace where customers want more than a technology partner, they want a company with deep industry knowledge,” Ed Kilroy, president of IBM’s Canadian operations, said in a conference call.

Given this requirement, Kilroy said IBM benefited from last year’s acquisition of PricewaterhouseCoopers (PwC), which included consultants focused on transportation.

IBM, of Armonk, N.Y., has also praised ex-PwC consultants with helping win new business with financial service firms and up-and-coming radio frequency identification players.

Allen Borak, CPR’s vice President of Information Services, said the company chose outsourcing to save money and free up IT staff to work on other projects, including a customer relationship management initiative.

CPR has spent five years revamping its IT systems and applications and viewed outsourcing non-core maintenance and upgrades as the logical next step.

CPR did not say who else was considered for the business. IBM usually competes with Computer Sciences Corp., EDS and Hewlett-Packard for large outsourcing deals. Earlier today, EDS announced a deal to add 3Com networking equipment to its offerings in an effort to provide more choices to enterprise customers in the competitive outsourcing field.

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