ARMONK, N.Y. -- Circuit City Stores, Inc. and IBM (NYSE:IBM - News) today announced a major expansion of their strategic relationship with a seven-year, $775 million Information Technology (IT) infrastructure services contract. This comprehensive agreement enables Circuit City to modernize its IT infrastructure services faster while reducing expenses.
The relationship covers a broad-based set of services and technologies. Areas that IBM will manage for Circuit City include data center operations, store support services, e-commerce hosting operations, service desk operations, network management, network services, desktop support, enterprise systems management and IT security administration.
The agreement includes support for more than 600 Circuit City Superstores and more than 43,000 employees across the US. By leveraging IBM's global resources and support structure and implementing efficient and consistent processes, tools and architectures, Circuit City estimates a cost savings of more than 16 percent over the length of the contract.
Under part of the agreement, IBM Global Technology Services will manage the testing and introduction of new technologies aimed at improving customers' in-store shopping experience at Circuit City. The retailer also will leverage IBM's extensive experience in managing high-volume Web sites with the company hosting and supporting the technology powering the Circuit City e-commerce channel.
"IBM has the experience and capability that we need to strengthen and modernize our IT infrastructure faster, better and more efficiently," said Bill McCorey, senior vice president and chief information officer of Circuit City. "We've already collaborated on many key areas of our IT transformation, including point-of-sale and the complete overhaul of our merchandising and supply chain systems. This agreement builds on that previous work and enables us to continue focus on upgrading critical information systems to support the business transformation."