IBM Completes Deal With Sun (Life, That Is)

Big Blue will provide a range of tech services to the Toronto-based insurer.

Paul McDougall, Editor At Large, InformationWeek

April 9, 2009

2 Min Read

Stalled merger talks with Sun Microsystems aren't keeping IBM from signing agreements with other companies named after Earth's closest star.

Big Blue on Thursday disclosed a seven-year deal to provide a range of tech services to insurance provider Sun Life Financial.

Under the pact, worth about $240 million, IBM will manage Toronto-based Sun Life's IT infrastructure, including its mainframe computer operations, in Canada and the United States. The deal enhances an outsourcing agreement that Sun Life signed with IBM in 2002.

"Our relationship is being extended to provide new, highly integrated, cost-effective, and intelligent solutions to support Sun Life's business goals," said Saad Toma, general manager of Global Technology Services for IBM Canada.

Also Thursday, IBM announced a five-year outsourcing deal with Sainsbury's. The agreement calls for IBM to build smarter inventory systems for the British retailer. The system, to be created on the WeSupply supply chain platform, will electronically link Sainsbury's with its 4,000 suppliers.

"To support our continued growth, we were looking to enhance our collaboration with suppliers without a significant increase in cost, while continuing to introduce greater intelligence into our supply chain," said Tim Goalen, director of supply chain operations for Sainsbury's.

Meanwhile, IBM's merger talks with Sun Microsystems show no sign of a revival.

Negotiations collapsed Sunday following IBM's tabling of a price that was lower than its original offer and Sun's insistence that it consider other proposals, according to several published reports -- all of which cited unnamed sources. Officials for Sun and IBM haven't commented on the issue since the discussions began.

Complicating the process is a reported split in Sun's board that has put CEO Jonathan Schwartz and chairman Scott McNealy on opposite sides of the table. McNealy is said to be against a deal, while Schwartz is said to favor an acquisition by IBM.

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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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