IBM to standardise Diageo's IT in £300m deal

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IBM to standardise Diageo's IT in £300m deal

Mike Simons
Drinks giant Diageo has signed an "on demand" outsourcing contract with IBM that could be worth more than £300m over seven years.

Diageo, best known for brands such as Guinness, Smirnoff, Johnnie Walker and Baileys, is seeking to update and simplify its ITinfrastructure after a series of mergers and sales of subsidiaries.

The deal calls for IBM to redesign, standardise and consolidate the drinks company's global IT infrastructure, including its helpdesk, desktop platform, global network and datacentre operations. Diageo will also outsource the management of its IT infrastructure to IBM.

Robin Dargue, chief information officer at Diageo, said, "This agreement will help to underpin Diageo's drive for consistent and sustainable profit growth by providing a simpler, more efficient and flexible infrastructure."

Diageo has refused to put a value on the contract, but Meta Group analyst Stratos Sarissamlis, who was briefed on the deal, estimated the total value to be between $400m (£254m) and $500m.

Diageo is using IBM's pay-per-usage model, which Sarissamlis said would give "consistent service quality across different operations in various countries. It is important for them to revamp their infrastructure and have a consistent architecture."

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