Edit: Sorry for the duplicate posting.
IBM Wins Large Wal-Mart Storage Deal, Edges Out EMC
By Siobhan Kennedy
NEW YORK (Reuters) - International Business Machines Corp. (NYSE:IBM - news), the world's largest computer company, said on Monday it has displaced key competitors to win a high- profile storage equipment deal with retail giant Wal-Mart Stores Inc. (NYSE:WMT - news).
The deal, which highlights the growing momentum for IBM's ''Shark'' line of storage products, calls for IBM to supply 12 of its mainframe business computers and 20 Shark devices to run Wal-Mart's industry-leading inventory and supply system.
The new contract, worth an estimated tens of millions of dollars by analysts, will supplant Wal-Mart's previous deals with IBM arch-rival EMC Corp. (NYSE:EMC - news), the storage industry leader, Hitachi Data Systems and an older storage equipment pact with IBM.
Wal-Mart -- which last year had revenues of nearly $200 billion -- has long been considered the retail sector's model for using technology to manage inventory and distribution. That way products in hot demand are quickly replaced on store shelves, maximizing potential profits.
``Strategically, it's very, very important to us,'' Dave Carlucci, general manager of IBM Americas, said in an interview with Reuters on Friday. ``It certainly makes this one of our biggest installations.''
The senior IBM executive declined to say how the Wal-Mart deal compared in size with other major retail customers that Big Blue serves, such as Saks Inc. (NYSE:SKS - news), Gap Inc. (NYSE:GPS - news) and the No. 3 supermarkets group Ahold NV .
But this is the biggest deal IBM had ever won where it displaced existing competitors on such a large scale, he said. Wal-Mart has installed a 50-terabyte IBM system capable of storing five times as much data as is housed in U.S Library of Congress.
``To get all of our storage in there, where we weren't positioned well, and to get the next generation of our Z series (mainframe) with it, is very positive,'' Carlucci said.
Analysts said the deal was a sign that IBM's storage line was now recovering ground it had previous lost to EMC.
``There's huge competition in the market today and IBM is fighting back,'' John McArthur, an analyst with market research firm International Data Corp. said. ``For IBM to show this big of a deal is a huge comeback for them.''
Using IBM's mainframe computers and storage will enable Wal-Mart to order and replace inventory across its 4,000 plus stores worldwide more efficiently than before, Dan Phillips, Wal-Mart's vice president of technology, said.
``Something that may have run in two hours is now running in an hour and 15 minutes,'' Phillips said referring to a typical cycle of its restocking process.
The deal is particularly significant given the depressed economic climate for retailers, said Randy Covill, senior retail analyst with industry research firm AMR Research.
``It's all about cost-savings and operational efficiencies,'' Covill said. ``I think they're pushing that pretty hard right now.''
The announcement of one of its largest storage deals comes the day before IBM is due to report its third quarter earnings on Tuesday. Winning new mainframe and storage contracts helps drive demand for IBM's other big businesses, including services and consulting work necessary to install its equipment. |
