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BNSF signs 10-year outsourcing deal with IBM

Burlington Northern and Santa Fe Railway (BNSF) has signed a 10-year deal to outsource its IT infrastructure to IBM. Richard Russack, a spokesman for BNSF, said the deal is worth "hundreds of millions of dollars".

Under the deal, which takes effect on 1 September, IBM will manage BNSF's mainframe, its 450 mid-range Intel and Unix servers, and about 16,000 desktop, laptop and LAN printers, said Buddy Meyers, managing principal of the Transportation Consulting Group at IBM Global Services.

IBM will run BNSF's data centres, although BNSF will retain ownership, he said. BNSF will also receive access to IBM's Center of Transportation.

IBM, which has had a long relationship with BNSF, will manage the railroad's e-mail systems and help desk. However, application development is not part of the contract, Meyers noted.

BNSF chief information officer Greg Fox said turning to a technology partner made sense because the rail company had taken its IT infrastructure as far as it could go on its own. BNSF realised that it would save money by outsourcing IT and focusing on its core competency, he said.

Fox said he hopes the transportation centre will be a springboard for developing a common IT infrastructure and common applications for the entire rail industry.

John Fontanella, an analyst at AMR Research, said it makes sense for BNSF to outsource management of its infrastructure while keeping control of its mission-critical applications.

But he was sceptical about BNSF's lofty goal of a common IT infrastructure for Class 1 railroads. "I have never seen any examples in any industry of building common platforms and common applications," he said.

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