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IBM lands Qantas outsourcing deal

The computing and services giant's Global Services wing announces a $450 million contract to manage the Australian airline's data center and handle other information technology needs.

IBM Global Services on Monday announced a $450 million, 10-year contract from Australian airline Qantas Airways to manage its data center and other information technology needs.

The deal is effective May 31. IBM will shift all Qantas servers to IBM's Sydney data center and run machines and a range of managed services for Qantas at different locations.

The Australian airline will use the IBM servers on an on-demand basis with payment limited to usage time. IBM claims that the arrangement will help Qantas cut costs and increase flexibility and efficiency.

IBM has been pushing its on-demand services, saying the process will enable it to outsell its competitors. The company has been trying to convince customers that on-demand computing maximizes performance while cutting overhead.

This is the third major deal landed by IBM in less than a month. Earlier, global oil giant Shell and Morgan Stanley inked outsourcing contracts with IBM.