IBM Wins Pearson Outsourcing Contract; Inks New Zealand Deal

IBM said Wednesday that it has won a deal worth an estimated $128 million to provide a range of outsourced tech services to publishing company Pearson.

Under the five-year agreement, IBM will manage key back-office systems for the publisher, including billing, inventory control, order entry, product distribution, payroll, and sales reporting.

The deal also covers so-called business resiliency services, under which IBM will ensure that Pearson's business systems remain available in the event of a disaster.

The agreement, which covers Pearson operations in 30 locations across 11 states, extends an existing contract signed in 2002 under which IBM was performing similar services for Pearson.

It kicks in starting in 2009, after the 2002 deal expires.

Pearson will pay for the services on an as-needed basis, allowing the company to maintain "the flexibility of our operating units," said Atish Banerjea, Pearson's chief technology officer, in a statement.

Pay-as-you-go, or utility computing, is catching on among businesses, such as retailers, that typically endure seasonal spikes in commercial activity. Under such deals, companies usually pay the outsourcer a base fee and additional fees based on the number of compute cycles consumed.

Separately, the Earthquake Commission of New Zealand and IBM have inked a 10-year, $13.09 million deal to replace the commission's existing claims management system with a new, Web-based claims management and customer service system. The system is slated to be operational by the end of this year, IBM said.

Under the terms of the agreement, IBM will deploy, host, and manage for the commission claim processing software called ClaimCenter, which was developed by Guidewire, a U.S.-based IT systems provider. In addition, the company is tasked with making updates to Guidewire's system depending upon the commission's requirements.