Qwest Communications International has awarded IBM an
outsourcing contract valued at up to $2bn over 10
years.
Although Qwest and IBM have opted not to disclose the deal's
terms, SoundView Technology Group analyst Michael Bowen said in a
research note that the companies signed a 10-year contract valued
at between $1.8bn and $2bn.
Qwest is outsourcing general IT tasks which are common to large
companies, including management of mainframe and mid-range servers,
administration of databases, handling of electronic messaging
systems and provision of back-up and recovery services, said Kate
Varden, a Qwest spokeswoman. The contract takes effect immediately,
she added.
Qwest expected the deal to generate savings and to allow it to
improve its customer service.
About 600 Qwest IT employees in the US will be offered jobs with
IBM, including 280 at Qwest's headquarters in Denver. The employees
affected represent less than a tenth of the company's total IT
workforce, Varden said.
Qwest outsources other IT tasks to other IT service providers,
mostly on a project or an as-needed basis, but handles the bulk of
its work in-house. Of the IT work that Qwest does outsource, this
engagement with IBM is significant because it is a more formal,
structured and long-term agreement than Qwest's average outsourcing
engagement, she said.
Qwest is not outsourcing to IBM any "proprietary" or sensitive
IT tasks related to competitive or customer operations.
The outsourcing deal affects Qwest operations in the US only,
which is where the company generates most of its revenue and where
most of its operations are located.
Qwest is a telecommunications service provider with 50,000
employees and 25 million residential and business customers. Its
portfolio includes local, long-distance and data services.
Juan Carlos Perez writes for IDG News Service