IBM in €1.5bn IT deal with ABN Amro

1 Sep 2005

UPDATE: IBM today revealed a landmark €1.5bn contract with financial giant ABN Amro to implement an on-demand IT infrastructure that will enable the bank to more rapidly roll out additional services while significantly reducing IT costs.

The contract, worth € 1.5bn over five years, supports ABN Amro operations worldwide and represents the most extensive rollout of IBM’s data centre automation technology, Universal Management Infrastructure.

As part of the contract, IBM will establish an innovation centre to develop advanced IT services to support new financial products

IBM will support ABN Amro desktop PCs as well as associated printers and PDAs, freeing the bank from maintaining and updating these systems. The end users will be supported by IBM’s global helpdesk, providing a single point of contact for bank employees.

“In the world of modern banking, technology drives customer satisfaction as well as bottom-line results,” commented Hugh Scott-Barrett, chief operating officer and managing board member, ABN Amro.

“IBM’s technology expertise, in conjunction with its knowledge of the banking industry, will underpin the value of this global IT relationship, supporting ABN Amro in building sustainable competitive growth for the organisation,” he said.

According to the IT analyst firm Ovum, deals of this magnitude are scarce in continental Europe and particularly in The Netherlands. However, the company pointed out that ABN Amro has a history of awarding IT services mega deals. In August 2002, it signed a five-year €1.5bn contract for infrastructure-led outsourcing with EDS for its wholesale clients operations.

Continental European companies often favour multisourcing where the client manages the individual relationships with vendors. This time, ABN Amro has selected five providers. The main deal is the infrastructure-led outsourcing of desktops, servers and storage contract awarded to IBM. The contract, which goes live on 1 November, does not overlap with the existing EDS deal.

Another interesting aspect to the deal is that ABN Amro is now offshoring some of its application services to providers based in India. The contract includes separate provisions for application support and control but Infosys, Patni and TCS are selected ‘preferred vendors’ for the application development of the contract. “ABN Amro joins other European banks including ING, BNP Paribas and Societe Generale that now source IT expertise from India,” Ovum remarked.

By John Kennedy and Gordon Smith