[Am-info] IBM and Linux get a BIG one!!

[Fred A. Miller]

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American Express, IBM Sign $4B Deal

American Express Co. bought into IBM Global Services' utility-
based IT servicedelivery model in a big way Monday. The 
financial services firm will pay IBM Global Services about $4 
billion over seven years to host its Web site, network servers, 
data storage, and help-desk support.

The American Express contract is IBM Global Services' largest 
for utility-based service delivery, says Paul Sweeny, IBM 
Global Services' general manager of financial services. Sweeny 
adds that the recession is pushing acceptance of the utility-
based model, in which payments are based on actual usage of IT 
services rather than a flat fee. American Express estimates 
that it will save "hundreds of millions of dollars" on IT 
during over the life of the contract, he says.

As part of the agreement, American Express will also move about 
2,000 employees worldwide to IBM Global Services. The employees 
will continue to work out of American Express' data centers in 
Phoenix and Minneapolis, as well as locations in England and 
Australia. In March, IBM will begin taking over American 
Express' transaction-processing operations.

The concept of on-demand access to IT resources isn't new, but 
it's been slow to attract large companies such as American 
Express, says Andrew Schroepfer, president of Tier 1 Research. 
Larger companies have been compelled by cost-cutting measures 
in the past year to procure IT services through autility-based 
model because it relieves them of the responsibility of 
upgrading equipment and managing the IT environment. Says 
Schroepfer, "This is a more efficient technological way to buy 
processing power and a more efficient way to pay for it." 
- - Larry Greenemeier

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- -- 
Fred A. Miller
Systems Administrator
Cornell Univ. Press Services
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