IBM, ACS Ink Disney To IT Services Deals

Contracts total $1.3B; firms said to absorb 1,000 jobs

The Walt Disney Co. last week said it has signed separate IT services contracts valued at more than $1.3 billion with IBM and Affiliated Computer Services Inc.

A $730 million contract with IBM and a $610 million deal with ACS, both set at seven years, will allow Disney to shift "certain back-of-house IT work" to IBM and ACS, said Disney spokeswoman Michelle Bergman.

She said that the affected Disney IT employees will have the opportunity to be transferred to the services vendors, though she declined to say how many workers will be affected. A source put the number at 1,000, or about one-third of the Burbank, Calif.-based company's IT staff. ACS confirmed that its contract will bring about 500 Disney workers into its fold.

Bergman said that Disney expects the move to "improve organizational flexibility and the effectiveness of existing operations."

The transition will take place over the next two months, said Bergman.

IBM's Duties

Under its agreement, IBM will support Disney's IT infrastructure, which consists of mainframe systems, about 3,700 Unix and Intel-based midrange servers, and 1.4 petabytes of data storage, according to IBM spokesman John Buscemi.

Buscemi said IBM will be responsible for the ongoing development and support of key Disney software, including its SAP implementation and approximately 90 legacy applications from Disney's theme parks and its resort business. The applications will be supported on-site at Disney facilities as well as at an IBM application center in Tulsa, Okla., he said.

IBM will be responsible for development and support of an SAP implementation and 90 applications for Disney's theme parks and its resort business.
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IBM will be responsible for development and support of an SAP implementation and 90 applications for Disney's theme parks and its resort business.
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"Under the contract, IBM will centralize some operations and standardize processes, tools and methodologies across Disney's diverse computing infrastructure," said Buscemi.

He added that the new contract builds on a long-term relationship that was expanded in 2001, when IBM's business consulting services unit began work to consolidate Disney's finance, human resources and payroll services onto a single SAP software platform.

Support From ACS

Meanwhile, Dallas-based ACS will support Disney's technology infrastructure and network architectures, as well as provide desktop help assistance and some computer processing services, said ACS spokeswoman Lesley Pool.

As part of the deal, approximately 500 Disney IT workers "will come aboard ACS and support Disney," said Pool.

"This is a significant opportunity to provide IT outsourcing services," Pool said. She pointed out that the agreement will enable Disney to focus more closely on its core business in the entertainment industry.

"It lets us pick up the technology offerings and bring them better technology, newer technology and take their technology folks and begin to advance them in their technology career paths," she said.

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