IBM Scores $5B Deal With JP Morgan

JP Morgan Chase signs seven-year outsourcing agreement, worth in excess of $5B, with IBM

December 31, 2002

2 Min Read

NEW YORK -- J.P. Morgan Chase & Co. finalized with IBM a groundbreaking seven-year outsourcing agreement, in excess of $5 billion, the largest of its kind. The agreement will enable JPMorgan Chase to transform its technology infrastructure through absolute costs savings, increased cost variability, access to the best research and innovation, and improved service levels. By moving from a traditional fixed-cost approach to one with increased capacity and cost variability, JPMorgan Chase will be able to respond more quickly to changing market conditions. JPMorgan Chase will outsource a significant portion of its data processing technology infrastructure, including data centers, help desks, distributed computing, data networks and voice networks. The agreement includes the transfer of approximately 4,000 JPMorgan Chase employees and contractors as well as selected resources and systems to IBM in the first half of 2003. Application delivery and development, desktop support and other core competencies will largely be retained inside JPMorgan Chase. "We view technology as a key competitive advantage. Our agreement with IBM will create capacity for efficient growth and accelerate our pace of innovation, while reducing costs, increasing quality and providing exciting career opportunities for our employees," said Thomas B. Ketchum, vice chairman, J.P. Morgan Chase. "IBM's global strength and computing capabilities, delivered 'on demand', will help us create significant value for our clients, shareholders and employees." IBM Global Services and JPMorgan Chase are creating a virtual pool of computing resources that will be accessed and deployed as needed. The underlying technology, developed by IBM Research, is called Utility Management Infrastructure (U.M.I.). U.M.I. uses advanced software based on open standards to tie together disparate back-end systems, such as different brands of servers and storage devices, without requiring new applications to be written for each separate system. The technology also enhances the availability, reliability and security of IT infrastructure. J.P. Morgan Chase Bank & Co. IBM Corp.

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