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IBM has announced that communications services group WPP has extended its partnership with the tech giant, providing a service delivery and technology platform to run WPP’s operations in the cloud for $1.25bn (£797m).
The current agreement will last for seven years, with WPP able to expand the use of big data and analytics and deploy new products and services through Big Blue.
“As the world’s largest communications group, we are seeking to exploit IBM’s cloud computing expertise to allow us to innovate and add value to both the service and the product we deliver to clients across 111 countries,” said WPP Group CIO Robin Dargue.
This isn’t the only deal coming from Armonk towers in recent months, with multi-billion dollar deals agreed between IBM and ABN Amro, a Dutch bank, as well as German airline firm Lufthansa. And according to reports, this won’t be the last announcement either.
IBM’s push towards becoming the leader in cloud computing has been aggressive for the past 12 months, having shoved $1bn (£638m) of investments into that space to rebrand as a cloud-first company back in March. A lot of big legacy tech firms have been moving this way as well – SAP, Oracle, Microsoft – with similar results in struggling financials and job cuts.
The firm’s Q3 numbers showed revenue down 4%, operating net income down 18%, yet cloud revenue was up more than 50%. They’re numbers which make analysts and investors worry, but it’s to be expected when moving your revenues to cloud-based ones rather than legacy software.
Globalfoundries recently picked up IBM’s chipmaking division, at a cost of $1.5bn to Big Blue, as a clear sign of where IBM CEO Ginni Rometty wants to move the company. As she explained on the analyst call: “The strategy’s correct, and now it’s our speed of execution that needs to continue to improve.”
IBM has also made strides to partner up with its perceived competition in recent months, announcing an agreement with SAP to help run its HANA Enterprise Cloud. The two companies, even though they’re enemies in the cloud vendor war, have partnered for more than 40 years. It’s certainly a trend – take Microsoft’s recent buddying up with Dropbox, even though Redmond has its own storage product in OneDrive.