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IBM expands on-demand deal with Equifax

The company's Global Services endorses an extension of a contract to provide on-demand technology services to the credit-reporting agency.

IBM on Thursday said it inked a contract extension with Equifax, expanding its agreement to provide on-demand technology services to the credit-reporting agency.

Based on the deal, IBM's Global Services unit added five-and-a-half years to its existing pact to support Equifax operations in the United States, Canada and Europe. IBM representatives said the extension should result in an additional $400 million in revenue, bringing the total value of its service agreement with Equifax to roughly $800 million. IBM's original deal with Equifax was set to expire in 2007.

Equifax reported that the systems to be managed under the agreement include mainframes, midrange servers and a global help desk. According to the companies, IBM will also provide Equifax with an "advanced enterprise system" and asset management tools.

IBM has been pushing its ability to provide on-demand computing capabilities to businesses, using grid-computing technology to drive down customers' IT expenses. Grid computing employs networked computers to share the processing load for complex tasks. IBM is one of a handful of companies, including Hewlett-Packard and Sun Microsystems, that offers businesses the ability to tap into huge networks they have built.

Philip Guido, general manager of IBM's financial services business, pointed to similar deals reached with companies such as American Express and J.P. Morgan Chase as proof that IBM's on-demand plans are gaining momentum.

Equifax representatives said they expect to garner savings of $5 million in 2003, with the possibility to cut $9 million from IT expenses in 2004. The companies estimated that Equifax could stand to save as much as $20 million annually by 2006.

IBM has recently won a spate of IT services deals including a $1.1 billion, 10-year IT services contract with ABB, a Swiss power and automation technologies company. The company also reported major wins with Qwest Communications International and the state of California in a recent conference call with analysts.

On that call, IBM Chief Financial Officer John Joyce said that IBM had inked deals totaling almost $3 billion this quarter. In the second quarter of this year, IBM's total signings for services, including strategic outsourcing, were $10.7 billion.