IBM takes over AMEX IT in £2.8bn deal

American Express, which runs one of the world's largest IT organisations, has signed a £2.8bn, seven-year deal with IBM, to take...

American Express, which runs one of the world's largest IT organisations, has signed a £2.8bn, seven-year deal with IBM, to take over its IT operations.

The agreement is expected to save American Express hundreds of millions of pounds in IT costs.

Glen Salow, executive vice-president and chief information officer at American Express, said he was looking for IBM to provide computing resources on demand at a predictable, best-in-class cost.

Salow said the service needed to be delivered with the highest levels of quality. "IBM has the unique combination of skills, processes and economies of scale to meet these requirements and ensure our IT systems foster business growth," he said.

The contract, due to start in March, means IBM will optimise Amex's worldwide computer systems and Web sites and provide skills and computing resources on a proactive and "on-demand" basis. Around 2000 American Express staff will be transferred to IBM, starting in the US. From May, staff in other regions will move to IBM.

American Express will retain its core technology competencies, including information technology strategy, strategic relationships, the development and maintenance of applications and databases and the management of its businesses' technology portfolios.

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