IBM bags $1.1bn Gap deal

18 January 2006International retail group Gap has signed a 10-year IT outsourcing deal with IBM, which is to take over parts of its IT operations.

The IBM contract will provide Gap with mainframe, server, network, helpdesk and support services across its branch of US-based stores and corporate locations.

IBM will also migrate the retailer’s more than 2,850 US stores on to a wireless network, as well as consolidate existing IT systems. But as well as reducing infrastructure costs, Gap executives hope the deal will help it increase sales.

“Delivering capabilities that drive our retail business, provide competitive advantages and serve our customers are our highest priorities,” said Michael Tasooji, chief information officer and executive vice president at Gap Inc.

The San Francisco-headquartered retail group, which includes the Gap, Banana Republic and Old Navy brands, said it expects around 400 of its employees to transfer to IBM.

The contract will run initially for 10 years, but Gap has an option to extend it for an additional three years at the end of that period. IBM recently posted its financial results for its fiscal fourth quarter. Revenues from its Global Services division were down 1% year-on-year to $12 billion.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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