Federal Armed Forces Agency

IBM and Siemens' $9B contract with German military could benefit a range of suppliers

January 18, 2007

2 Min Read
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Germany's Federal Armed Forces agency has signed a ten-year IT services contract worth about $9 billion with Siemens Business Services (SBS) and IBM. And an IBM source says storage is part of the project. (See IBM, Siemens in $9B IT Deal.)

"There is a storage element in the project in both IBM and Siemens Business Services' areas of responsibility. However, at this time we cannot go into further detail or quantify this specifically," says IBM spokesman Peter Gerdemann.

Just a fraction of the overall project, called Herkules, would be a nice slice of the pie. Plans include the modernization and management of the German agency's non-military networks and data systems in over 1,500 locations countrywide. New gear will include 140,000 PCs and 7,000 servers, in addition to hundreds of thousands of phones, both fixed-line and mobile.

Working under the banner of a newly formed company called BWI Informationstechnick GmbH (BWI IT), IBM and SBS will upgrade the agency's data centers, communications, and applications, which include Web-based apps and SAP databases. A new public key encryption system will be adopted for security.

SBS and IBM are equal partners in BWI IT, of which they own a 50.1 percent stake. Germany's federal government owns the rest of the Bonn-based outfit.Storage for the new network will no doubt encompass lots of vendors. Siemens offers storage gear through its Fujitsu-Siemens subsidiary, which in turn has alliances with a long list of players, including Atempo, Brocade, CA, Cisco, Iron Mountain, EMC, Microsoft, NetApp, Quantum, Sun, and Softek.

Besides selling its own storage line, IBM partners with a range of suppliers, including LSI and NetApp. (See IBM/NetApp Deal Blossoms and IBM Swings NetApp Gateway.)

The IBM/SBS deal in Germany has been in the works for nearly two years. The two vendors rose to the top of bidding back in May 2005, when press reports said they'd triumphed over Mobilcom, EADS, and CSC Ploenzke.

The news casts a welcome ray of sunlight on SBS's otherwise lackluster landscape. The division brought in the lowest amount of sales ($6.5 billion) for Siemens in fiscal 2006. While that's a hefty figure, it represents a 4 percent year-on-year decrease.

Siemens itself is undergoing a major investigation by regulatory bodies in the U.S. and Europe, following allegations of bribery by some former staffers. (See Corruption Probe Targets Siemens Staff .)IBM has also been aggressively seeking new contracts, particularly in the area of services, where the firm reported a 5 percent decrease in new business last quarter. (See IBM: In a State.)

Mary Jander, Site Editor, Byte and Switch

  • Atempo Inc.

  • Brocade Communications Systems Inc. (Nasdaq: BRCD)

  • CA Inc. (NYSE: CA)

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • Computer Sciences Corp. (CSC) (NYSE: CSC)

  • Fujitsu Siemens Computers

  • IBM Corp. (NYSE: IBM)

  • Iron Mountain Inc. (NYSE: IRM)

  • Microsoft Corp. (Nasdaq: MSFT)

  • MobilCom AG

  • Network Appliance Inc. (Nasdaq: NTAP)

  • Quantum Corp. (NYSE: QTM)

  • Siemens Business Services

  • Softek Storage Solutions Corp.

  • Sun Microsystems Inc.

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