IBM Wins $330 Million Outsourcing Deal From Allianz

Allianz said the agreement will help it reduce IT infrastructure expenses by 20% annually and achieve operational savings of more than $150 million within the next three years.

Paul McDougall, Editor At Large, InformationWeek

August 21, 2007

1 Min Read

IBM said Tuesday that it has signed a deal worth $330 million to provide insurance giant Allianz with a range of technology services.

Under the seven-year agreement, IBM will help Allianz of America create a single, managed IT footprint for both of its North American businesses -- Fireman's Fund and Allianz Life Insurance.

"By negotiating one contract for both entities, we leverage scale much more effectively," said Oliver Bussmann, CIO at Allianz, in a statement. Allianz did not say whether the agreement would have an impact on its IT employment levels.

IBM will implement a "single service management framework" for Allianz that includes data center services, storage management, desk-side support, and security monitoring. Printing services are also included in the deal.

Allianz officials said they expect the agreement will help it reduce IT infrastructure expenses by 20% annually and achieve operational savings of more than $150 million within the next three years.

Fireman's Fund had previously outsourced a number of tech functions to IBM under a separate deal worth about $130 million. The addition of Allianz Life Insurance means the relationship is worth an additional $200 million to IBM.

Even as it faces increased competition from offshore players, IBM's outsourcing unit has been building momentum of late. The company's Global Technology Services division posted a 10% gain in year-over-year revenue in IBM's most recent quarter, to $8.8 billion. It also signed new services contracts totaling $11.7 billion during the period, up 22% over the previous year.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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