At first glance, IBM has won a massive $873 million outsourcing contract with the State of Georgia. But The VAR Guy took a closer look and discovered Dell Managed Services will also cash in on the engagement. A trusted source says the contract ranks as one of Dell’s largest managed services and Software as a Service (SaaS) deals to date.
First, the facts. According to an IBM press release:
The State of Georgia has awarded IBM a contract, valued by the State at $873 million, for information technology (IT) outsourcing services over eight years. The contract also includes two additional one-year optional extensions … The contract will support Governor Perdue’s initiatives to better serve Georgia residents by consolidating 11 independent IT environments into an integrated and reliable operation. The agreement was signed on November 20, 2008. …
IBM will provide the State with a range of data center services including mainframe and midrange system management, service desk, disaster recovery and IBM Internet Security Systems will supply security services. In addition, the agreement will enable the State to replace an aging infrastructure and migrate older technologies onto newer IBM technology platforms.
Dell Managed Services
Now, for the Dell twist: IBM says Dell is a sub-contractor on the deal. And a trusted source — a former neighbor, in fact — tells The VAR Guy the State of Georgia will use Dell Managed Services. Dell has acquired a series of companies — Silverback Technologies, Everdream and MessageOne — to build out its managed services and software as a service (SaaS) efforts.
Dell is walking a fine line in the managed services market. On the one hand, the company has signed up more than 150 VARs and solutions providers to offer Dell Managed Services to their customers. But on the other hand, Dell has been testing direct managed services sales with customers in New York and Texas. Now, the State of Georgia — with an assist from IBM — will take the Dell Managed Services plunge as well.
So far, so good for Dell. But things aren’t all peachy for the PC giant. During a separate conversation today, another source told The VAR Guy that Dell’s Silverback sales have been mostly flat since Dell acquired Silverback. Meanwhile, the managed services market has been growing. And growing.
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Two Updates:
1. Another source close to Dell says Silverback sales have actually been growing, but that much of the growth involves Dell hosting the solution for VARs.
2. Another source (boy, The VAR Guy is full of anonymous sources this week…) says Dell’s portion of the State of Georgia deal is worth more than $20 million. However, our resident blogger doesn’t know if if the $20 million is just for services or also includes PCs and servers… Perhaps yet another source will offer up that info to our resident blogger.
Two weeks ago, Governor Rick Perry stopped the transfer of state data to IBM’s IT systems until the company implemented a plan to fix the problems, which is expected to be completed by November 17. The state also fined IBM almost $902,000 for data lost through failed back-up attempts.
Hope they have better luck wih GA……
Believe me… this is nowhere near the largest deal, Dell managed services has aquired.
that would be ‘acquired’.. of course
MarkA: If you’ve got gossip or financial details to share, feel free to spill them on this site. The VAR Guy and he loyal readers can keep a secret