Under the agreement, IBM will provide infrastructure services for Gap’s IT operations, including mainframe, server and network services. IBM will also handle help desk, disaster recovery, and user services, as well as store operation services, such as the technology and integration for wireless networks.
About 400 Gap staff will transfer to IBM as part of the deal. The contract includes performance standards under which Gap may cancel the contract if IBM’s work falls short. After the ten-year term expires, there is also a three-year option.
IBM on Tuesday also reported its services revenue for Q4 2005, although the Gap contract wasn’t counted in these results.
Some analysts were worried that lagging bookings during the quarter could impact IBM’s numbers, but bookings came in safely at $11.5bn, down from $12.7bn a year ago but ahead of some analysts’ forecasts. Services revenue for the quarter was $12bn, down from $12.6bn.
