American Express has entered a seven-year information technology outsourcing contract with IBM worth $4 billion.
Under the agreement, IBM will provide American Express with on-demand access to computing resources from the card organisation's existing facilities in Phoenix and Minneapolis, and deliver technical support services on-site at American Express locations worldwide.
Approximately 2000 American Express technology employees will transfer to IBM as a result of the deal, beginning with US operations staff in March. International handover arrangements will commence in May and will take a phased approach, dependent on the completion of in-country agreements and compliance with local regulatory requirements.
American Express says it will continue to retain its core technology competencies, including IT strategy, strategic technology relationships, the development and maintenance of applications and databases and the management of its businesses' technology portfolios.
The card organisation has one of the world's largest IT operations, processing approximately one billion transactions daily. Its mainframe systems alone provide tens of thousands of MIPS of computing processing power.
Doug Elix, IBM senior vice president and group executive, IBM Global Services, comments: "The utility computing service delivery model American Express is adopting will give it the flexibility to draw on all the computing resources, skills and technologies required to support future growth."