UK life and pensions outfit Friends Provident has inked a 10 year, £200 million, IT and infrastructure services outsourcing deal with IBM.
Under the agreement - which covers all aspect of technology infrastructure, including software, hardware and services - around 200 staff will transfer to IBM and its partners by March 2009. IBM will receive around £150 million in the fourth quarter for the deal.
Friends Provident expects the deal to generate potential cost savings of around £6 million a year by increasing standardisation, improving processes and using shared infrastructure and offshore resources.
This will contribute to the firm's aim, stated in a strategic review in January, of making annual savings of £40 million, over a two-year period, from its operating cost base.
Trevor Matthews, CEO, Friends Provident, says the cost savings made through the deal will make the business deal "leaner, fitter and more efficient".
"By partnering with IBM, one of the world's leading technology providers, we will gain access to the latest processing power and the expertise to improve our service and technology further," says Matthews.
The contract also provides an opportunity for hardware to be refreshed, he says, and in future the ability to provide mainframe capacity on demand through IBM's cloud computing technology.
Separately, IBM has won a deal with the Chilean Stock Exchange for a new securities trading platform based on the vendor's WebSphere MQ low latency messaging technology.
IBM says the platform will speed up transactions and provide better communication with other exchanges. It will also improve the flexibility, scalability and security of the service the exchange provides to corporate clients and optimize its electronic transaction management.
Capacity will be increased to over three thousand orders per second, 100 times greater than at present, and latency reduced to two milliseconds, 100 times lower than current level.
Luis Siles, general manager, IBM Chile, says: "This agreement will mean a major breakthrough in the quality of service delivered to the Commodities Exchange, allowing it to compete as the financial markets become ever more high velocity, low latency, and high transparency in nature."