Clothes retailer Gap has signed a 10-year, $1.1bn (£650m) IT outsourcing deal with IBM.
Gap, which operates more than 3,000 stores worldwide, is hiring IBM to streamline its IT operations and reduce costs.
The move includes transferring around 400 Gap employees to IBM. As part of the contract, IBM will provide data centre, server and network outsourcing to Gap, in addition to help desk operations.
The overall cost of the outsourcing deal will depend in part on the clothing retailer’s actual consumption of IT services.
In another innovative aspect of the contract, Gap will pay for services based on changing market rates over the duration of the contract.
Gap said it would be performing regular benchmarks to make sure it was not paying above the odds.
Gap chief information officer Michael Tasooji said, “Delivering capabilities that drive our retail business, provide competitive advantages and serve our customers are our highest priorities. Transferring our technology infrastructure operations to IBM enables us to deliver and implement these solutions faster.”