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IBM wins massive outsourcing contract from Lufthansa

The IBM/Lufthansa deal is not only about saving money.
The IBM/Lufthansa deal is not only about saving money.

German airline, Lufthansa, will outsource its entire information technology infrastructure services division (and about 1400 employees) to IBM in a deal worth a billion Euros (about £800 million, $1.25 billion, AU$ 1.4 billion).

The seven-year contract will see IBM step up efficiency plans, such as using more on-demand, cloud computing resources (including IBM's own Watson), in a bid to save Lufthansa up nearly 500 million Euros over the duration of the deal.

But cost savings are not the only thing that Big Blue will bring to the table. The company will also help Lufthansa accelerate its ditgization process, implement new business analytics solutions, mobile computing and social business tools that aim to boost employee productivity as well.

Antitrust authorities and Lufthansa's own supervisory board still need to rubber-stamp the agreement but it is very likely to go through given that it needs to save money.

"The agreement provides Lufthansa constant access to IBM research and development." Martina Koederitz, general manager of IBM Germany, said in a statement "This will enable Lufthansa to incorporate the latest technology and innovation into the Lufthansa IT infrastructure, including strategic areas such as cloud computing, big data analytics or cognitive computing systems like Watson."