IBM Extends Equifax Outsource Deal

In its latest longterm IT outsourcing deal, IBM has added five years and $400 million onto an existing contract with credit agency Equifax .

Big Blue will manage Equifax mainframes, mid-range servers, Web systems, networks, and a global help desk in the United States, Canada and Europe. IBM will provide Equifax with enterprise systems and asset management tools.

“(The deal) provides Equifax a global technology infrastructure that is responsive to changes in demand, and allows us to continue delivering world class products and services to our customers,” said Thomas F. Chapman, Equifax chairman and CEO.

The move is expected to save Equifax $5 million this year and $9 million next year. By 2006, the Atlanta company will save more than $20 million annually.

IT outsourcing has become increasingly popular as large companies seek to reduce overhead costs and focus resources on their core businesses.

Three weeks ago, IBM closed a multi-year deal with telecom carrier Qwest Communications that industry watchers estimate could approach $2 billion. The contract includes maingrame, mid-range dat center operations and database management.

And in April, IBM landed a $300 million engagement with Brazil’s largest telecommunications company, Embratel. The contract calls for IBM to manage mainframes, over 200 servers and 27,000 pieces of additional equipment such as PCs and laptops.

Often, IBM will absorb IT staff of its customers as part of the deal. For example, in 600 Qwest workers will join IBM. That doesn’t appear to be the case with Equifax. An IBM spokesman was not immediately available for comment.

Other firms that compete with IBM for large IT outsroucing deals include EDS and Computer Sciences Corp.

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