7 March 2002 Systems and software giant IBM has signed a five-year, $500 million (€571m) contract to supply Swiss food and beverage specialist Nestlé with servers, storage systems and database software. The deal represents a significant blow for IBM’s rival Hewlett-Packard, which already supplies Nestlé with a range of hardware and services.

Nestlé plans to use IBM server technology in a major drive to consolidate and standardise its IT operations into five data centres across the globe. At present, the company runs its IT operations from over 100 sites, but this will be reduced to two centres in Switzerland, and one each in Australia, the US and Germany. This is the centrepiece of Nestlé’s programme to achieve more than $1.8 billion (€2.0bn) in cost-savings and benefits by 2006.

The new data centres, which Nestlé will manage in-house, will use a range of server hardware from IBM’s eServer product line-up. Nestlé will install a mix of Unix-based servers and xSeries Intel servers running Windows. The company also plans to invest in IBM’s high-end ‘Shark’ storage servers, as well as its DB2 database software.

Nestléwill use its data centres to run business applications from German enterprise resource planning software giant SAP. Nestléwill use this to expand its external business by allowing trading partners and customers to access online applications such as customer account services, claim Nestléexecutives.

HP played down its disappointment at Nestlé’s decision, saying it still considered the company a “strategic customer” and one of its top 70 global accounts.