In what is becoming a trend of major tech companies tapping into their existing client base for new business, IBM has announced a $300 million dollar 10-year deal with Emirates to provide IT Infrastructure-as-a-Service, and improve airport operations and business management systems.
Essentially a hands-off deal for Emirates, IBM will completely manage the service, allowing the client to focus on core operations and leaving the entire IT department to the capable hands of IBM. Of note is the fact that Emirates is already a long-standing client of the tech giant: the airline’s ticketing and reservation system has been running on IBM mainframes for the past 30 years.
Emirates is now fourth in the growing list of airline operators using IBM’s technology as their backbone.
The first was in 2014 with Lufthansa, the German carrier, which inked a 7-year IT infrastructure management deal with IBM for 1 billion Euro. The deal involved an optimization of their IT processes that was estimated to generate 70 million Euro in savings every year for Lufthansa. In effect, that would pay off 50% of the deal’s cost over the seven-year period.
The second deal came a year later with the announcement that Finland’s largest airline, Finnair, would use IBMs services for a five and a half year period to transform their own IT into a hybrid cloud model using IBM’s technology strength. It also involved a host of value-add services for customer interaction, such as mobile on-flight services.
Hot on the heels of the Finnair deal came the announcement of Etihad Airways’ nearly $700 million IT and investment agreement with the Armonk, NY, company. Again, the focal point is hybrid cloud services and enhancement of guest experience.
IBM’s aggressive push into the airline vertical with their hybrid model of cloud infrastructure and related services is merely one among several initiatives that CEO Ginni Rometty has taken on to turn the company around from a lumbering software and hardware giant with a ton of legacy businesses, into a forward-looking one that thrives on big data, analytics, cloud and other strategic imperatives.
IBM is already a leader the hybrid cloud segment, and reported overall cloud revenues of $10.8 billion on a trailing twelve months basis as of their last quarterly earnings report.
