IBM wins Texas data center pact

IBM this week captured a $863 million statewide data center services contract in Texas.

IBM’s agreement with the Texas Department of Information Resources could span a decade if all options are exercised. The contract is part of the state’s plan to create a shared technology infrastructure. The Texas legislature passed a bill in 2005, tasking the department with consolidating the data centers.

“By selecting a service provider for statewide data center operations, Texas can leverage economies of scale realizing greater value from data center expenditures,” according to the DIR's August report on consolidation.
The state expects to save $25 million from 2008 to 2009 and $159 million during the contract’s seven-year base period.

IBM’s contract replaces and builds upon one that Northrop Grumman had won in 1996. The Northrop contract accounts for about 30 percent of the total volume of the new contract, according to a DIR spokeswoman.

“The new contract is both a re-bid and an expansion of the current data center services contract,” she said. The current contract expires August 31, 2007.
The state received two bids for the contract: one from an IBM-led team and the other from Northrop Grumman, which partnered with Affiliated Computer Services, AT&T, Accenture, and RFD and Associates, the spokeswoman said.
IBM’s team includes AT&T, Dell, Deloitte, Pitney Bowes, Unisys and Xerox, she added.

IBM will provide overall program management, mainframe and server consolidation, and IT operation among other services, according to the DIR data center service newsletter. Unisys will provide data center operations and facilities management. Xerox will provide print management and operations, while Pitney Bowes provides mail management and operations.

AT&T, Dell, and historically underutilized business subcontractors will offer hardware, software and services such as change management, risk management and user acceptance training.

Each state IT employee affected by the new contract will receive a job offer from IBM or a subcontractor. The employment offer will represent at least a 5 percent increase over the employee’s current salary, according to the state. The DIR spokeswoman said 332 state employees throughout 27 agencies will have the option of transferring to the IBM team.