IBM Inks $1.1 Billion Outsourcing Deal With Gap - InformationWeek

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IT Leadership // IT Strategy

IBM Inks $1.1 Billion Outsourcing Deal With Gap

The 10-year pact calls for IBM to support and manage mainframes, servers, networks, and data centers, as well as provide help-desk and disaster-recovery services.

Gap Inc. is turning over the management of its IT infrastructure to IBM under an outsourcing deal worth about $1.1 billion, according to a regulatory filing by the casual clothier. Under a 10-year deal disclosed in a Securities and Exchange Commission document dated Jan. 13, IBM will provide a broad range of technology services to Gap, including support and management of mainframes, servers, networks, and data centers. IBM will also provide Gap with help-desk and disaster-recovery services.

As part of the deal, about 400 Gap workers will transfer to IBM. They may have reason to be nervous. Increasingly, at least some amount of corporate IT work that's outsourced to a services vendor ends up offshore after a transition period of several months. The process is seldom acknowledged publicly by either party. Officials at IBM and Gap weren't immediately available for comment.

To receive the full value of the contract, IBM needs to meet a number of service levels and other conditions, according to the SEC filing. Failure to meet the conditions would entitle Gap to receive "credit against charges otherwise due," withhold "certain payments," or "terminate the agreement."

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