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IBM Wins $5 Billion, Seven-Year Outsourcing Deal With JPMorgan Chase

Paula Rooney and Charlene O'Hanlon

As part of the deal announced on Monday, the New York financial services giant plans to outsource a large portion of its technology infrastructure including data centers, help desks, distributed computing, data networks and voice networks to IBM Global Services, the bank said in a statement Monday.

The deal--IBM's second major win in a month--includes the transfer of about 4,000 JPMorgan Chase employees and contractors as well as select systems to IBM during the first half of 2003, the JPMorgan Chase statement said.

IBM landed a major 10-year outsourcing contract with European banking giant Deutsche Bank in mid-December. That contract is worth $2.5 billion and involves the transfer of 900 Deutsche Bank employees to IBM.

"[These deals are real evidence of financial [services companies trying to squeeze every dollar they can out of IT and paying for only what they need and what they use," said Sam Albert, president of Sam Albert Associates, Scarsdale, N.Y. "This sets a direction that people are embracing--the new idea of 'only pay for what you use' or 'pay as you go.' "

As part of the deal with JPMorgan Chase, IBM Global Services will deploy its homegrown Utility Management Infrastructure, which enables the creation of a virtual pool of computing resources that can be accessed and deployed as needed.

The infrastructure--designed to emulate a utility from which customers can access computing resources as needed, or "on demand"--uses open standards that enable the integration of disparate systems, servers and storage systems, the companies said.

Application delivery and deployment, desktop support and core competencies will be retained by JPMorgan Chase, the statement detailing the pact also said.

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