IBM and Rogers sign 7-year deal

IBM Corp. will provide IT services and support to Rogers Communications Inc. for the next seven years, according to a new contract signed last week. The dollar value of the agreement was not released.

“We have signed a seven-year agreement with IBM for the outsourcing of ITS Infrastructure, ITS Operations, and IT Support Centre Services with the intent of improving our service levels and building a scaleable, cost efficient infrastructure,” said Jerry Brace, senior vice-president of IT Services with Rogers Communications.

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Immediate changes include linking Rogers’ existing data centre facility to IBM data centres located outside Toronto. Upgrades to the data centre facilities and storage capabilities are anticipated to take place over the next few years.

Specific changes planned for the data centre include expansion of space “to accommodate organic customer growth, support the deployment of our new customer care and billing platform and enable improved levels of systems recovery,” said Brace. Plans for managing the storage environment include storage consolidation and data governance, he added.

Rogers is likely looking to offset some capital expenditure, according to Darin Stahl, lead analyst at Info-Tech Research Group Inc. “They might be facing a bunch of refresh, a bunch of significant investments and a deal like this allows them to tap into that without having to fund all that CAPEX themselves and so they trade that off for smooth-line OPEX [operating expense],” he said.

Stahl predicts the deal will give Rogers more operational agility. “They’re going to get some access to skills they may or may not have in-house and, more importantly, they don’t have to fund those skills in-house. They can tap into those skills and capabilities on a pay-by-the-drink almost basis,” he said.

Rogers doesn’t anticipate any noticeable changes from a customer perspective, but positive long-term results are anticipated.

“Rogers constantly monitors the capacity of its computer systems and data centres. When pre-defined thresholds are reached, the planning for additional capacity begins. Although this operational improvement is not customer-facing, it will have a positive long-term impact on Rogers customers,” said Bruce.

Lower costs to Rogers customers are unlikely, according to Stahl, but the deal may lead to interesting technology packages and more solutions down the road.

“Back in 2006, Rogers entered an agreement with HP … what that resulted in ultimately was some more flexibility to do some interesting offerings for customers … I think that’s really what’s going to happen,” he said.

Announcements with roots in the new contract could take anywhere from 12 to 36 months, Stahl noted. “There’s certainly a ramp-up period and project start-up period that have to take place before those benefits are really realized,” he said.

IBM was unavailable for comment.

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