American Express Teams with IBM in Industry-Leading Technology Services Initiative

Innovative Partnership Strengthens American Express' Competitive Technology Advantage with e-Business on Demand

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New York, NY & Armonk, NY - 25 Feb 2002: American Express Company and IBM today announced a technology services partnership that will enhance the performance and efficiency of American Express' global technology infrastructure. The deal is worth more than $4 billion over a seven-year term, with options to extend.

Effective March 1, IBM will provide American Express with utility-like access to its vast computing resources, improving the quality, performance and delivery of American Express technology systems. The agreement is expected to save American Express hundreds of millions of dollars in information technology (IT) costs over its term. In addition, having IBM's resources on demand will provide American Express with the flexibility to adjust rapidly to changing business needs.

It is expected that approximately 2,000 American Express technology employees will be able to transfer to comparable positions at IBM. The transfer of American Express U.S. technologies operations work to IBM will take place in March. The transfer of American Express international technologies operations work is scheduled to begin in May and will take a phased approach, dependent on the completion of in-country agreements and other matters and compliance with local regulatory requirements.

"Our goal in this partnership is to ensure that American Express is the world's best user of information technology," said Glen Salow, executive vice president and chief information officer, American Express Company. "In technology operations, that means computing resources are available on demand at a predictable, best-in-class cost and are delivered with the highest levels of quality. IBM has the unique combination of skills, processes and economies of scale to meet these requirements and ensure our IT systems foster business growth."

American Express -- which offers products and services in more than 200 countries -- has one of the world's largest IT operations, processing approximately one billion transactions daily. Its mainframe systems alone provide tens of thousands of MIPS of computing processing power.

To support American Express' future growth, IBM will optimize the company's worldwide computer systems and web sites, providing skills and computing resources on a proactive and "on-demand" basis. IBM will reallocate resources as necessary to ensure that IT priorities are aligned with American Express' business needs. American Express will continue to retain its core technology competencies, including information technology strategy, strategic technology relationships, the development and maintenance of applications and databases and the management of its businesses' technology portfolios.

"Today American Express is placing itself at the forefront of a new computer services paradigm," said Doug Elix, IBM senior vice president and group executive, IBM Global Services. "The utility computing service delivery model American Express is adopting will give it the flexibility to draw on all the computing resources, skills and technologies required to support future growth.

"In addition, the knowledge and skills of the American Express technology employees joining IBM will be a valuable asset to our relationship with American Express and to IBM overall," Elix said.

IBM will support its "on-demand" services partnership with American Express with the most advanced and reliable data center technologies and enterprise systems management processes available in the industry. IBM will provide data center and computer services from American Express facilities in Phoenix and Minneapolis. It is also expected to deliver technical support services on-site at American Express locations around the world.

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