IBM bags billions of dollars in IT services deals in a matter of days

IBM wins deals worth $3.6bn over the course of a few days, with advertising giant WPP the latest to ink a billion-dollar contract

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IBM has won deals worth $3.6bn over the past couple of weeks, with advertising giant WPP the latest to ink a billion-dollar deal.

The seven-year contract worth $1.25bn will see WPP, which last year reported revenue over $17bn, put digital services on a hybrid cloud managed globally by IBM.

Through the services contract, IBM will transform and manage WPP's global technology platform.  

“We are seeking to exploit IBM’s cloud computing expertise to allow us to innovate and add value to both the service and the product we deliver to clients across 111 countries,” said Robin Dargue, WPP Group CIO.

IBM has more than 100 cloud services, thousands of experts and 40 datacentres worldwide. 

At the same time, financial markets information supplier Thomson Reuters is also using IBM’s cloud to deliver analytics and mobile IT support services. It plans to use the service to make the mobile workforce more responsive and to bring new products to market faster.

Rick King, CIO technology at Thomson Reuters, said the deal will help improve operational processes and internal services across the business “to enable our employees around the globe to focus on faster innovation for our customers”.

On 1 December, ABN Amro extended its multi-billion euro outsourcing deal with IBM by another 10 years. In November, German airline Lufthansa confirmed a €1.25bn seven-year outsourcing contract with IBM, to reduce IT costs by €70m a year.

IBM said all these deals over the past fortnight have a combined value of $3.6bn.

In its recent results for the third quarter of 2014, IBM said the cloud was an important focus. IBM Global Services sales decreased by 3% to $13.7bn, compared with the same period in 2013. Pre-tax profit from Global Technology Services reduced by 11%.

IBM CEO Ginni Rometty said in areas of focus – which did not include IT services – the company did well. “While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – including cloud, data and analytics, security, social and mobile – where we continue to shift our business. We will accelerate this transformation,” she said.



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