IBM Gains Needed Server Boost with $115 Million European Commission Deal
IBM (IBM) landed a much-needed shot in the arm for its sagging hardware business, landing a two-year, $115 million deal with the European Commission (EC) for the vendor’s x86-based System x and Flex Systems servers that includes configuration support from a German channel partner.
IBM (IBM) landed a much-needed shot in the arm for its sagging hardware business, landing a two-year, $115 million deal with the European Commission (EC) for the vendor’s x86-based System x and Flex Systems servers that includes configuration support from a German channel partner.
Under terms of the contract—the largest for servers ever awarded by the EC—Bechtle AG, an IBM Premier Business Partner, will arrange server preparation and configuration support at its Neckarsulm, Germany headquarters. IBM said it beat out Dell, Fujitsu, Hewlett-Packard (HPQ) and Bull in bidding to win the contract.
The Directorate General for Informatics (DIGIT) administered the contract award, which sets up a blueprint for the EU’s procurement of IBM x86 servers, maintenance, upgrades and professional services. The contract is inter-institutional, in that other EU organizations such as the European Parliament, the European Court of Justice in Luxembourg and Europol will use the framework for buying x86 servers, officials said.
"That the EU would award us a contract of this size and scope illustrates the value of our server and services offerings in helping them meet their technology, economic and international relations goals," said Harry Van Dorenmalen, IBM Europe chairman.
IBM certainly can use the hardware boost. Including its most recent Q3 2013 performance, the vendor has posted six straight quarters of negative revenue growth and seven straight quarters in which the company has missed analysts’ revenue expectations.
In Q3 2013, IBM’s systems revenue fell 19 percent, with its Power line falling 38 percent, System x sliding 18 percent and storage falling 11 percent. Among its hardware platforms, only System z mainframe server products showed some life, with a 6 percent uptick.
IBM said it and Bechtle already have provided some $2.6 million in servers and services under the contract and expect to supply more than 6,100 servers to EU organizations and agencies in the award’s two-year lifetime.
The contract holds the possibility of a two-year extension and contains a clause in which some 45,000 working days could be made available for additional professional services.
