Qwest Taps IBM for Outsourcing

IBM has signed a multiyear IT outsourcing pact with Qwest Communications , the companies confirmed this afternoon.

Financial terms were not disclosed but some analysts said the contract could approach $2 billion in value.

Qwest spokeswoman Kate Vardan said the tasks covered are “common to companies of our size” including mainframe, mid-range data center operations and database management.

About 600 Qwest employees in Colorado, Nebraska, Utah and Washington, will tranfer to IBM as a result, said IBM spokesman James Sciales.

The companies did not disclose the value of the contract, nor say how much Qwest expected to save.

News of the agreement hit on the same day that IBM was set to announce its second-quarter results.

In recent years, Armonk, N.Y.-based IBM has emphasized its services business, convincing a number of large companies, including telecoms, that they can save millions by farming out non-core IT work and shedding staff.

For example, in April, IBM signed a $300 million deal 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.

Other major players in the outsourcing field include Computer Sciences Corp., EDS and Hewlett Packard, among others.

IBM and Qwest have a working relationship. Three years ago, they teamed to offer data center and other services to joint customers.

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