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Norwegian IT supplier Evry has signed a $1bn IT outsourcing deal with IBM as part of an ongoing business transformation project, which will see 600 members of staff move to the supplier.
The deal covers all infrastructure platforms, such as Mainframe, Unix and Wintel, for a period of at least 10 years.
As part of the deal, Evry will continue to manage the datacentres in which IBM operates its technology, but almost 600 Evry employees, over half in Norway, will be transferred to the supplier.
“This isn’t much of a surprise, given that IBM signed an agreement several years ago with Evry for mainframe services and certain software,” said Rolf Frydenberg, Manag-E CEO and spokesperson for the Cloud Security Alliance Nordic Summit.
“Evry was created out of mergers and acquisitions over many years, so internally there are a lot of different ways of doing things. In helping to consolidate old technologies and processes, IBM has become an important strategic partner.
“IBM taking more responsibility for things below the software layer makes a lot of sense. With this arrangement, Evry can put a lot of legacy issues behind it and be more market-focused in the future,” he said.
To accelerate the process, Evry has announced it will invest NOK500m in its infrastructure platform over the next three years, giving its Nordic customers access to cloud technology based on IBM’s Softlayer platform for the first time.
The EL&IT union, which represents many employees in Evry, claims the announcement will lead to uncertainty in the organisation.
A statement from EL&IT read: “Evry’s ambition is to be the leader in the development and operation of IT systems in the Nordic region. The union believes a prerequisite for achieving this goal is a thorough knowledge of customers’ development needs. Evry loses this knowledge through the outsourcing of 332 employees who are affected by the new agreement.”
The Norwegian media reports an increasing uncertainty amongst Evry employees. This announcement comes hot on the heels of September’s report that up to 550 jobs would go from across Evry’s Norwegian and Swedish operations.
The deal is subject to approval from the Norwegian competition authority, although industry veteran Frydenberg believes this process is a formality. He said this deal could mark the “coming of age” of cloud adoption in Norway.
“Consumer cloud services are popular, but cloud in enterprise IT still really hasn’t taken off in Norway. A lot of cloud-based software-as-a-service systems are only available in English, so this deal should create more Norwegian focus on local cloud systems,” said Frydenberg.
“The majority of Norwegian service providers which claim to be cloud providers are very small. To most of us, cloud services means a high-scale environment with thousands of servers, not one rack and a handful of employees. I think this announcement will impact that thinking and perhaps lead to more consolidation across enterprise IT in the Nordics,” he said.
Read more about Nordic suppliers
- Ericsson has announced the closure of its Katrineholm operation in Sweden with the loss of almost 500 jobs.
- Nokia says there may be a path back to mobile phone manufacturing through a brand licensing model.
- Evry aims to save NOK400-500m a year to help it achieve goal of being the “Nordic champion in IT services”, says CEO.