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January 17, 2019updated 18 Jan 2019 10:17am

IBM and Vodafone in £425m Partnership

Ginni Rometti: "JV will securely integrate critical business applications, driving business innovation – from agriculture to next-generation retail"

By CBR Staff Writer

UPDATED 15.45 17/01/2019 with details.

IBM and Vodafone Business are launching a major new partnership the two said today, in a significant tie-up between the US and UK multinationals that will see them open a joint London office by May 2019 and co-develop new services.

The combined entity will help companies adopt multi-cloud technologies and business solutions enabled by 5G, edge, and Software Defined Networking, they said today. The joint organisation is being designed to act like a startup, they said.

It will launch May 2019 and tap dedicated execs from both companies but will not be formally incorporated as a discrete JV, a spokesman confirmed to Computer Business Review. It is expected to tap several hundred staff across the two businesses.

It will use the “innovation of the garage methodology” IBM’s Michael Valocchi said in an accompanying video. The two will jointly go to market with existing products and also co-develop new ones, with the team expected to include designers and developers.

Under the terms of the deal, Vodafone Business customers will gain full portfolio to IBM’s cloud offerings, the two said in a joint release. IBM will provide managed services to Vodafone Business’ cloud and hosting unit, in an eight-year deal valued at approximately $550 million (£425 million).

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IBM Vodafone Tie-Up: Will Help Integrate Critical Business Applications

“IBM has built industry-leading hybrid cloud, AI and security capabilities underpinned by deep industry expertise,” said IBM Chairman, President and CEO Ginni Rometty.

She added: “Together, IBM and Vodafone will use the power of the hybrid cloud to securely integrate critical business applications, driving business innovation – from agriculture to next-generation retail.”

See also: IBM Agrees $325 Million Cloud Deal with Juniper Networks

Vodafone CEO Nick Read said the venture “allows us to focus on our strengths in fixed and mobile technologies, whilst leveraging IBM’s expertise in multicloud, AI and services… driving radical simplification and efficiency in our business.” 

Carla Arend, Senior Program Director, European Software, at research house IDC said: “This new venture between Vodafone and IBM addresses the ‘full stack’ of real-world multi-cloud concerns with a powerful combination of capabilities that should enable customers to deliver multi-cloud strategies in all layers of their organizations.”

She added: “IBM’s acquisition of Red Hat and Vodafone’s emerging 5G technologies have the potential to amplify the value further… We estimate the global cloud market (hardware, software, services) to be worth $420 billion in 2019. If you add to that the global cloud connectivity market which is worth $2 billion, the combined market opportunity here is huge.”

The two are currently assessing UK premises, a spokesman said.

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