GM aims for global IP system with new AT&T deal

21.02.2007
General Motors Corp. has agreed to a US$1 billion, five-year contract with AT&T to help the auto maker continue development of a global IP network supporting voice, data, video and other services, the two companies said Wednesday.

The announcement renews an earlier five-year agreement between the two companies, but also expands on it by giving AT&T responsibility for managing GM's relationships with its other telecom providers, some 150 companies globally. The management role for AT&T is part of GM's overall goal to ensure that all of its IT providers work together and follow a consistent set of service and support practices.

"It follows the mindset that information technology providers have to work as one in a corporation," said Ralph Szygenda, GM's CIO and group vice president. "They can't work as a bunch of IT companies competing against each other inside your own company."

GM has already taken this approach in its IT contracts and is outsourcing some $15 billion in IT world over five years. GM began awarding contracts one year ago this month, with Electronic Data Systems Corp. continuing to have the largest share of the auto maker's IT services work, with contracts valued at about $1.4 billion annually.

AT&T now provides GM with a global virtual private network and has built an IP network based on Multiprotocol Label Switching (MPLS) technology, which allows network traffic management by priority.

"Now the next five years is really taking it to a totally different level," Szygenda said. The auto maker today runs operations on a global basis, with the capability to work with designers and suppliers no matter where they are located, he said. The company wants to continue to build out the capabilities of its MPLS network that will integrate voice, data and video, he said.