The company is to reduce the 270 servers across four datacentres used by Thomson and First Choice by almost 90% using virtualisation software from VMware.
The number of servers will be cut to just 30 by the end of 2008, reducing maintenance and power costs.
Keith Newman, IT director for TUI UK, said the servers would be located in Hanover, Germany, where Thomson has long held twin datacentres as part of its disaster recovery plan.
"We have completed 20% of the consolidation process since the merger in September, but we are progressing rapidly now that the change freeze is over," he said.
Newman said the company was taking the opportunity of the server consolidation exercise to standardise on the hardware, operating system and storage devices for the common storage infrastructure to be used by the Thomson and First Choice brands operated by TUI Travel.
Both brands will also use a common web infrastructure although each will continue to concentrate on different types of holidays, with First Choice aimed at families and Thompson at couples. First Choice is set to launch a new website by mid-2008.
"My focus at the moment is to bring the two companies on to common systems and applications," said Newman. "I am looking at IT as enabler to bring the two companies processes together and save cost through resultant synergies rather than looking to cut IT cost directly."
Newman said TUI Travel was switching to common applications across the two brands with some hybrid systems, but about 90% were those formerly used by Thompson because the company had already done a lot of work to move to a more flexible business model to combine package and component selling.
"Off the back of a detailed review, and considering that the future direction of the business is very much a balance between package and component, the Thompson application set was the most appropriate one to go for," Newman said.
In terms of the back-office systems, TUI Travel has standardised on financial and procurement software from Oracle, with human resources and payroll still under review.
Newman also plans to standardise on Thomson's infrastructure support and application development outsourcing agreements with Wipro and Sonata in India.