Movie and TV powerhouse Viacom has called on IBM's help in a bid to
deliver a new generation of digital entertainment to
customers.
IBM will provide consulting and new technology initiatives under a
seven-year contract that Viacom hopes will build a specialised
framework for pushing its wide-ranging entertainment content to
customers.
Under the deal, IBM will also provide IT outsourcing for Viacom,
taking over for several other vendors, each of which handles
different parts of Viacom's IT infrastructure.
Russ Pillar, president of the Digital Media Group at New York-based
Viacom, said the partnership with IBM will provide his company with
access to new technologies and improve its existing IT network.
"We're moving toward a world where people will have always-on
broadband connections and will be seeking entertainment content
that can keep up," Pillar said. "IBM has staked a significant piece
of its business in helping to figure out how to do this and we want
to avail ourselves of that work."
IBM will provide outsourcing for critical parts of Viacom's IT
system, including its help desk, call centre and data centre
support services for several Viacom units across the nation, Pillar
said. By consolidating the outsourcing services, Viacom expects to
receive better service at a reduced price, he said. "This was all
about leverage for Viacom," he said.
The financial terms of the deal have not been disclosed.
Laura Behrens, an analyst at Gartner, called the partnership
between the two corporate giants "the future of the entertainment
industry." Gartner estimated that the contract is worth more than
$500m (£341m).
"This is the kind of deal that they all have to do," she said,
because it recognises the huge technological challenges in making
digital information more pervasive. "This task is bigger than
anybody expected it to be," Behrens said. "Nobody's wrestled it to
the ground yet."
The deal is huge, she said, because Viacom is big enough to justify
doing it and IBM is skilled enough to help pull it off.
Neil Parker, the head of the media and entertainment group in IBM's
strategy and change consulting business, said the deal will allow
Viacom to strengthen its infrastructure as it looks at new
directions to sell its vast digital content to consumers.
"They specifically want to bring new services to market," including
digital video and wireless text and data, he said.
One of the key parts of the deal is the creation of a unified IT
platform that will solve problems that arise from having a
disparate group of systems across Viacom's business units,
according to IBM. The proposed cross-enterprise computing platform
would be capable of supporting digital media as well as computing
services delivered on demand.
The deal includes Viacom's MTV Networks, Showtime Networks,
Paramount Pictures, CBS and Viacom corporate units in 11 locations
across four states in the USA.
The two companies will partner in developing new initiatives such
as digital management of entertainment content, wireless content
delivery and continued future collaborations.