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IBM snags a deal at Ames

IBM Global Services inks a five-year, $112 million outsourcing deal to support all of the core information technology systems for Ames department stores.

IBM Global Services today inked a five-year, $112 million outsourcing deal to support all of the core information technology systems for Ames department stores, one of the nation's largest regional discount retailers.

Under the agreement, IBM Global said it will be responsible for all data center operations, which includes mainframe, midrange, and client server systems, IT support of midrange systems in four of Ames's distribution centers, and support for equipment in all of the Ames stores.

The services contract will control total cost of Rocky Hill, Connecticut-based Ames's service delivery and help the retailer increase productivity, the two companies said in a statement.

IBM Global has struck outsourcing deals with several prominent retailers in the last few months, and one of the differences with providing outsourcing for a retailer from other industries is simply the number of stores that it has to support--wiring the stores and supporting the tremendous amount of data and complexity, said David Caplan, an IBM spokesman. The differentiator, he said, in retail outsourcing is the sheer number of stores to support, and linking them all together.

In February, the services giant signed a seven-year, $200 million outsourcing agreement with computer retailer CompUSA to take over all of its IT applications and data services.

As reported, IBM Global had said it will take over responsibility for IT application development and data center operations that support Dallas-based CompUSA's 210 retail stores nationwide. The deal included related technical services, training, manufacturing, and call center management as well.

In addition to today's announcement with Ames, a discount retailer with annual sales of almost $4 billion, IBM Global said it currently provides outsourcing services to retailers, such as Dayton Hudson, a Minneapolis-based department store that also owns the Marshall Fields discount stores; Eckerd, a drugstore owned by JC Penny; and Federated department stores, which includes Macy's.

As part of this agreement, 52 Ames employees will become employees of IBM, the companies said.