Ericsson in new contract with IBM for outsourcing internal IT operations

Swedish telecom equipment maker Ericsson has signed a five-year IT outsourcing contract with IBM that includes application maintenance and development. Ericsson expects the contract to improve the efficiency of its IT delivery to approximately 70,000 end-users and reduce operational expenditures.

The new contract, which is an extension of a contract signed in 2003, will update Ericsson's IT services to cater better for the future needs of the company's employees and ensure flexible support for the global business.

Carl-Magnus Mansson, CIO and head of group IT at Ericsson, says, "We gain significant benefits by outsourcing our IT operations. It helps lower overall IT spending, reduces total cost of ownership and makes our IS/IT structure more efficient. It also ensures we are flexible and able to adapt to changing IT demands. Our supplier has clearly demonstrated it is the best-in-class provider and we are pleased to enter this long-term partnership."

The responsibility for Ericsson's internal, global, corporate voice and data network is not included in the outsourcing contract. This will be managed by Ericsson's business unit Global Services, who will also handle delivery of some business-critical applications and infrastructure services from its own Global Service Delivery Center.

The current IT outsourcing contract with IBM ends in fall 2008.