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July 11, 2023updated 31 Jul 2023 9:36am

Legal & General taps Kyndryl, Microsoft Azure and Dell for hybrid cloud data centre migration

The new IT set-up will be installed over the next seven years after the companies agreed a long-term partnership.

By Matthew Gooding

Financial services giant Legal & General has agreed a new seven-year partnership with Kyndryl to support the transition of its IT infrastructure into a new hybrid cloud environment.

Legal & General has selected Kyndryl for its hybrid cloud migration. (Photo by Ceri Breeze/Shutterstock)

The new agreement, which runs until the end of March 2030, will see Kyndryl help “accelerate L&G´s technology transformation agenda”, a statement from the two companies said. As part of the deal, Kyndryl will bring Dell and Microsoft’s Azure cloud platform on board as suppliers.

Legal & General is one of the biggest financial services companies in the UK. The FTSE 100-listed company provides life insurance, pensions and investment management services to clients around the world.

Legal & General says it has engaged Kyndryl to transition the hosting of its IT systems to a new data centre capable of managing hybrid cloud services. Hybrid cloud, which can involve a mixture of public and private cloud-based services and on-premises infrastructure, is increasingly popular among businesses, especially those in highly regulated industries such as financial services which have strict data protection regulations.

For this project, Kyndryl will implement a new on-premises Microsoft Azure hybrid cloud platform from Dell powered by Azure’s Stack HCI, closely coupled with an IBM zCloud mainframe. The companies believe this will help to mitigate any potential latency constraints and provide a building block for further public cloud migrations.

“We see this as a strategic opportunity for Kyndryl and L&G to build on our partnership, leveraging Kyndryl’s deep expertise and experience in providing secure, compliant and resilient compute, mainframe and cloud transformation services, alongside their knowledge of Legal & General,” said Mark Hall, group chief technology officer at Legal & General. “Kyndryl has taken a strong one-team ethos to the programme, underpinned by transparency and a great affinity to L&G’s unique culture and purpose.”

Financial details of the deal have not been disclosed, but Kyndryl says the new system will help Legal & General reduce technical debt, simplifying architecture, accelerate its cloud transformation, and enable it to consume services in a more carbon-efficient way. Legal & General already buys cloud services from AWS, having used Amazon’s cloud platform to build a “multi-account” system enabling users to access information securely from different parts of the world with different regulatory regimes.

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Kyndryl flexes its muscles in financial services

Kyndryl and Legal & General have a partnership that stretches back to 2010, when the former was part of IBM. It spun off into a separate company in 2021, with Big Blue choosing to focus on cloud and next-generation technologies, leaving Kyndryl to manage legacy infrastructure customers.

So far it’s been a slightly rocky road for the newly independent company, with its share price plummeting after its launch and not yet recovering. Its revenue for 2023 was $17bn, down 7% from the previous year. Partnerships with financial services companies, a sector where Kyndryl has a strong track record from its IBM days, are likely to be key to growing this revenue.

The IT services provider is keen to talk up the sustainability credentials of the new data centre. “In a further demonstration of both organisations’ strategic commitments to sustainability, this relationship will see Kyndryl move Legal & General’s services to a modern data centre location to consume services in a more carbon-efficient way and reduce its environmental footprint,” said Faith Taylor, vice-president and global sustainability officer at Kyndryl. “The new data centre is rated ‘excellent’ by BREEAM’s sustainability assessment framework, with an industry-leading PUE of 1.2.

“It is planned to be powered by 100% renewable energy aligning with Kyndryl and L & G’s sustainability commitments.”

Read more: IBM open hybrid cloud strategy pays dividends in 5G

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