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IBM clicks with Kodak in PC deal

Big Blue is midway through replacing 40,000 notebook and desktop PCs worldwide for the photography giant, displacing systems from rival Hewlett-Packard.

IBM is replacing Eastman Kodak's PCs worldwide, as the photography giant looks to cut its information technology costs.

The program, which began more than a year ago, will be completed next year and will result in the replacement of 40,000 notebook and desktop PCs, as well as a number of servers, according to IBM. The new systems will displace older machines from rival Hewlett-Packard.

Kodak chose to go with Big Blue because it makes software such as Rapid Restore, which will allow Kodak to better manage PCs, in part through standardization of the computer's "image," executives at Kodak said. The image is the bundle of software, including operating systems and applications, loaded on a PC.

IT departments at large companies such as Kodak generally prefer to use the same image across all company PCs, which makes it easier to administer PCs and helps to cut support costs.

Rapid Restore, which comes preloaded on all IBM desktops and notebooks, uses a hidden partition on the PC's hard drive to assist in restoring the system in the event of a problem. IT specialists can work remotely, which means a technician wouldn't necessarily have to travel to an employee's desk.

The Kodak contract represents a fairly sizable piece of business for IBM, which shipped worldwide about 2.1 million desktops and notebooks, as well as servers priced under $25,000, in the fourth quarter of 2001, according to IDC. The companies did not disclose the value of the contract.

IBM recently refocused its efforts in the desktop PC arena by outsourcing its manufacturing to Sanmina-SCI. The company will manufacture IBM PCs and also agreed to take over the company's facilities in North Carolina and Scotland.

The outsourcing should help IBM cut costs and also concentrate on creating more special services for its PC customers, the company said at the time. The company has developed, for example, a new security subsystem that includes a dedicated security chip as well as software that allows PC users to encrypt files.

IBM will also continue to focus on reducing support costs for customers.

Support costs for fixing problems or updating software dictate the majority of a company's total cost of owning and managing a PC, according to IBM.

Competitors Dell Computer, Compaq Computer and HP, among others, offer similar support services. Dell, for example, can preload a specific image on each PC purchased by a specific customer at its factory. IBM's approach is to send the PC to a specific center where software is loaded and the PC shipped.

However, IBM claims to offer a greater number of preloaded utilities and services, such as Rapid Restore and the security subsystem it recently made standard on all Netvista desktops and ThinkPad notebooks.

Meanwhile, IBM has been focusing on expanding its Global Services division as well as expanding sales of servers.