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International Business
Machines Corp. (IBM) and Fiat SpA announced yesterday a new
nine-year agreement which will result in IBM taking full
control of Global Value, the joint venture operation set up
four years ago.
IBM will now have a contract worth 1.7 billion euros to
provide information technology services to the Italian
carmaker once the agreement is completed. Global Value was
set up between IBM and Fiat in 2001 to provide IT services
across the Fiat Group, and to third party companies.
Global Value was part of an
outsourcing transaction in 2001 whereby Fiat established a
strategic partnership with IBM Italia, with a view to
rationalising its IT spending. Fiat's IT capability at the
time had been incorporated into the Group's 'Business
Solution's division. The venture had significant
capitalisation, its own independent management and an
abundance of qualified staff, including employees and
subcontractors. It also had production, sales, and marketing
activities necessary to allow it to operate as an autonomous
economic entity. IT services were categorised into various
segments: IT management services, business management
services, software development and integration, IT and
business consulting, software maintenance and support,
hardware maintenance and support, and education and
training.
Originally Gobal
Value was proposed as a seven year partnership, so this new
agreement will see a further extension added to the
provisional 2008 end date, with several hundred millions of
euros of additional business for IBM being added.
The venture will have 1,700 employees.
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Global Value originated as part of an outsourcing
transaction in 2001 whereby Fiat established a
strategic partnership with IBM Italia, with a
view to rationalising its IT
spending |
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International Business Machines Corp. (IBM) and Fiat
SpA announced yesterday a new nine-year agreement
which will result in IBM taking full control of
Global Value, the joint venture IT operation set up
by the two companies in
2001 |
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United States-based computer giant IBM, which provides
hardware, software and IT services, has annual revenues of
US$93 billion, assets of US$110 billion and over 329,000
employees worldwide. IBM was born in 1924, (created out of a
previous company, CTR). However its move into IT services
only happened as recently as 1989 as this sector got into
full swing, although today IT services accounts for more
than 40 pct of IBM's turnover. In 1991 IBM started to look
overseas, and two years later IBM Global Services was
formed.
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