IBM Awarded Multi-billion Dollar Computing Support Contract by The Boeing Company

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Somers, New York - 30 Sep 1998: ... IBM and The Boeing Company announced today that Boeing has awarded IBM a comprehensive information technology contract, valued at more than $2 billion over 5 years.

The outsourcing agreement builds on an existing 10-year contract with McDonnell Douglas signed in 1993. Under that contract, IBM Global Services provided computing and network support to former McDonnell Douglas units in St. Louis and Southern California. Negotiations with IBM to reach a new agreement are part of a Boeing effort to achieve synergies resulting from the August 1997 merger with McDonnell Douglas and the December 1996 acquisition of the aerospace and defense divisions of Rockwell. The new contract restructures and expands the scope of the original agreement.

Under the expanded agreement, IBM will provide telephone and video teleconferencing services to all of Boeing, including voice mail, equipment, operations and maintenance support. IBM will assume responsibility for enterprise servers located in data centers in Philadelphia, PA; Wichita, KS; Mesa, AZ; three sites in Southern California; and St. Louis, MO, and for consolidating them into a single site in St. Louis. IBM will also provide operational services and maintenance support to distributed servers and desktop computers at all Boeing locations in St. Louis and Southern California.

Boeing will take over responsibility for computing systems architecture, design, tools, and processes. In addition, Boeing will have full responsibility for the data network activity currently performed by IBM in St. Louis and Southern California.

"We were convinced that there were opportunities as a result of bringing three companies together to consolidate computing infrastructure and reduce variation," said Terry Milholland, Chief Information Officer of The Boeing Company. "By teaming with IBM, one of our strategic suppliers, we will be able to achieve the computing synergies and reduce the cost of providing computing support within Boeing business units."

"We believe the newly restructured information technology outsourcing agreement will assist Boeing in integrating the merged operations and help standardize tools and processes for managing the delivery of information technology," said Dan Colby, general manager, IBM Global Services.

A number of Boeing employees currently performing activities affected by the expanded agreement will have an opportunity to interview with IBM for possible transition to IBM, where they will continue to perform their tasks as IBM employees. Similarly, affected IBM employees will have the opportunity to interview with Boeing.

The Boeing Company is the largest aerospace company in the world and the nation's leading exporter. Boeing is also the world's largest manufacturer of commercial jetliners and military aircraft, and the nation's largest NASA contractor. The company has an extensive global reach with customers in 145 countries and operations in 27 U.S. states. Worldwide, Boeing and its subsidiaries employee more than 238,000 people. For more information about Boeing, visit

With 1997 revenues of approximately $26 billion, IBM Global Services is the world's largest information technology service provider. IBM's fastest growing business segment has unsurpassed breadth of capabilities, with more than 116,000 professionals helping companies of all sizes solve real business problems and create new business opportunities. For more information on IBM Global Services, visit

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