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IBM snags $15 billion services deal with Japanese giant

Big Blue's Japanese unit will provide telecom behemoth NTT with computer services under the 10-year deal, as IBM's consulting and services arm sees continued growth in Asia.

IBM Japan on Tuesday won a contract worth an estimated $15 billion to provide computer services to Japanese telecom giant NTT.

Under the 10-year agreement, Big Blue's Japanese unit will provide the NTT Group with computer services, including the installation and maintenance of IBM hardware, software and services. In turn, NTT Comware, a subsidiary of NTT, will provide IBM with access to its technical employees to work on other IBM projects in Japan.

IBM, which has been active throughout Asia, said it has drummed up more than $4.5 billion in services contracts in Japan alone. Last quarter, revenue from IBM Global Services, the company's consulting and services arm, rose 4 percent to $8.2 billion on continued strength in the region.

NTT, the former monopoly carrier in Japan, is one of the biggest telecommunications companies in the world.

IBM Global is one of the largest players in the growing consulting and information technology sector, competing alongside rivals such as Electronic Data Systems and Computer Sciences as well as smaller, pure-play Net consultants including Scient and iXL Enterprises.

Although the newcomers to the consulting market took the sector by storm a year ago with their e-commerce focus, a sudden shift in the Net consulting market has brought many highflyers back to earth scrambling to compete against the veterans for larger computer services deals.

In the latest earnings season, old-guard consultancies such as IBM Global and EDS posted healthy revenue growth, while most Net consulting companies churned out disappointing results.

NTT and IBM said they are still hammering out the details of the pact. Work under the new alliance is slated to begin in December. IBM Global will coordinate the computer services work under the new deal.