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IBM rings up $100 million sale to Shell

The oil company signs a five-year deal to use servers and other products for its core business software.

Royal Dutch/Shell has signed a five-year deal worth at least $100 million to use IBM servers and other products for the oil company's core business software.

The servers will be installed at three centralized Shell sites in a "single-source" agreement that makes IBM the prime equipment supplier, IBM said. The centers each will run business software from SAP and J.D. Edwards.

Shell drew on just about every product line at IBM for the deal. IBM is supplying its iSeries and pSeries servers for the deal, along with tape drives, its high-end "Shark" disk storage system, storage network switches, storage software and other products. IBM financing, maintenance and support also are included in the deal.

While IBM is the undisputed leader when it comes to offering so many products and services, Compaq and Hewlett-Packard have respectable breadth and are working to increase it, while the more focused concentration of Sun Microsystems has allowed it to steal away much of IBM's overall server leadership.

Shell hopes to save costs by consolidating computing operations at "megacenters," the company said. The three initial sites will be in Houston; Kuala Lumpur, Malaysia; and The Hague, Netherlands.