IBM signs $730M IT services deal with Disney

Von Linda Rosencrance

IBM has signed a seven-year, US$730 million IT services contract with The Walt Disney Co. -- the second such deal involving the entertainment company announced in as many days.

"Following an extensive review, Disney"s IT organization has concluded that in order to provide enhanced value, improve organizational flexibility and effectiveness of existing operations, and adapt resources more nimbly in response to changing business conditions, certain back of house IT work will be shifted to two outside domestic vendors -- IBM and ACS," Disney said in a statement.

The transition will take place over the course of the next two months, and affected employees will have the opportunity to be transferred to IBM or Affiliated Computer Services Inc. (ACS). Yesterday, Dallas-based ACS said it had signed a seven-year, $610 million IT outsourcing contract with Disney (see story) to support the company"s technology infrastructure and network architectures, as well as to provide desktop help assistance and some computer processing services.

Although Disney spokeswoman Michelle Bergman declined to say how many IT workers are affected, a source put the number at 1,000. That would represent about one-third of the Burbank, Calif.-based company"s IT staff.

Under the latest agreement, IBM will support Disney"s IT infrastructure transformation. IBM spokesman John Buscemi said the infrastructure consists of mainframe systems, about 3,700 Unix and Intel-based midrange servers as well as 1.4 petabytes of data storage. A petabyte is equal to 20 million four-drawer filing cabinets filled with text documents, he said.

Buscemi said IBM will be responsible for the ongoing development and support of key Disney software, including its SAP implementation and approximately 90 legacy applications from Disney theme parks and its resort business. The applications will be supported on site at Disney facilities as well as at an IBM application center in Tulsa, Okla., he said.

"Under the contract, IBM will centralize some operations and standardize processes, tools and methodologies across Disney"s diverse computing infrastructure," Buscemi said. "In particular, IBM will consolidate workloads from smaller servers onto more powerful machines, and these efforts will enable Disney"s various divisions to share computing resources, reducing costs and enabling faster rollouts of new products and services."

Buscemi said the new contract builds on a relationship between the two companies that expanded in 2001,, when IBM"s business consulting services began work to consolidate Disney"s finance, human resource and payroll services onto a single SAP AG software platform.