Washington Mutual Extends Outsourcing Contract With IBM - InformationWeek

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Washington Mutual Extends Outsourcing Contract With IBM

Washington Mutual Inc. and IBM Global Services havenegotiated a two-year extension to their 10-year, $533million outsourcing contract for desktop and networkservices awarded in 1996. The reason for the extension: Thefinancial services company's acquisitions have increased thenumber of desktops to be managed from 5,600 to 36,000.Sources say the extended contract is worth more than $1billion.

The initial contract was set up to permit renegotiation whencertain thresholds in growth were reached--and thosethresholds were reached quickly. In 1996, Washington Mutualacquired American Savings Bank for $1.2 billion. Thefollowing year, it bought Great Western Financial Corp. for$6.6 billion. Last year, Washington Mutual completed a $9.9billion acquisition of H.F. Ahmanson & Co. and itssubsidiary, Savings of America. In the process, WashingtonMutual has grown from $20 billion in assets in 1996 to $165billion today.

In addition to rolling out new hardware, IBM has providedproject management, help-desk services, and software-distribution tools, all of which contributed to rapidconversion of the acquired banks' systems to the OS/2platform that is the standard for Washington Mutual'sapplications.

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