GE Capital Services and IBM Announce Global Information Technology Outsourcing Alliance
STAMFORD, CT, (March 04, 1998) – In one of the largest agreements of its kind, GE Capital Services and IBM announced their intent to enter into a long-term information technology alliance.
Under the agreement, GE Capital Services will outsource its mainframe and midrange processing for its own businesses to IBM Global Services. IBM also will acquire the commercial data center outsourcing business of GE Capital Services Technology Management Services (TMS) and serve its current external customers worldwide. IBM will manage the data center and various network operations for GE Capital Services’ businesses, as well as for GE Capital Services’ customers. The agreement is scheduled to take effect at the end of the first quarter.
“GE Capital’s businesses rely on high quality, low cost data center processing. This unique alliance will lower GE Capital’s operating costs and enhance service quality,” said Nigel Andrews, Executive Vice President, GE Capital Services. “IBM’s best-of-breed strengths in mainframe and midrange computer services will allow the latest technology to drive continued long-term improvements in service quality and cost.”
The agreement extends the already extensive relationship between GE Capital Services and IBM. “We’re very pleased that GE Capital has chosen to expand their ongoing relationship with us,” said Doug Elix, General Manager, IBM Global Services, North America. “Through this alliance of industry leaders, we look forward to continuing to serve both GE Capital and now many of their highly valued customers around the world with the kind of quality, experience and depth that are IBM’s unique attributes.”
While financial terms have not been disclosed, GE Capital Services will realize significant immediate and long-term savings. In addition, IBM Global Services has committed to enhance IT service quality — critical to GE Capital Services in light of GE’s drive to Six Sigma Quality — improve cost efficiency, and continue GE Capital Services’ commitment to employees. The enhanced services also will be available to the current commercial customers of GE Capital Services TMS along with access to the extensive resources of IBM Global Services.
IBM initially will provide IT infrastructure services from GE Capital Services facilities located in Alpharetta, GA, Dallas, TX and Toronto, Canada. As part of the agreement, the majority of GE Capital Services TMS employees engaged in service delivery, including those at other sites, will be employed by IBM.
With its global IT Solutions business, GE Capital Services will continue its leadership role in providing desktop IT services to GE Capital Services and commercial customers worldwide. GE Capital Services has built, in IT Solutions, the leading global desktop services provider with current annual revenues of $10 billion. IT Solutions provides desktop and client server products, operating and applications software, local and wide area network design and IT consulting services to commercial and government customers through 200 offices in 20 countries worldwide.
GE Capital Services, with assets of approximately US$250 billion, is a global, diversified financial services company with 27 specialized businesses. A wholly-owned subsidiary of General Electric Company, GE Capital Services, based in Stamford, CT, provides equipment management, mid-market and specialized financing, specialty insurance and a variety of consumer services, such as car leasing, home mortgages and credit cards, to businesses and individuals around the world. GE is a diversified manufacturing, technology and services company with operations worldwide.
IBM Global Services is the world’s largest information technology services company with 1997 revenue of approximately $26 billion. IBM’s 110,000 services employees serve customers in 164 countries providing business and information technology consulting, systems integration, application development, product-specific support, and managed network services. Outsourcing customers include such well-known companies as Lucent Technologies***, Daiwa Bank***, Novartis***, McDonnell-Douglas*** and Mercedes-Benz.*** For more information visit www.ibm.com/services on the World Wide Web.
Source: IBM