IBM outsources remaining network team to AT&T

This is a really interesting story as I worked in this team about four months back, before leaving to join Orange.

Back in 1998, about 90% of IBM’s networking was sold to AT&T, only the Local Area Network teams around the globe remained to provide the connectivity IBM needed either in or between it’s data centres. What this deal means is that those network guys have gone to AT&T, so AT&T now does all of IBM’s networking, both in it’s data centres, between them and out to client sites for certain accounts.

This move by IBM clearly shows where it want’s to go in terms of it’s core business, which is Consulting and Software and not outsourcing. I had the discussion with various people within the sales organisations and the alliance teams about where IBM was going in terms of networking and what it wanted to do with it before I left. It was clear to me and a lot of other people within IBM, that IBM was leaving money on the table in certain deals but not being willing or being motivated to pick up the network portion of the deal. The view was; we’ll do network if you want us to, but it’s not important to us.

This point was a key factor in me leaving IBM, I came to the conclusion that IBM didn’t really want to be in the Network business and this sale of the remaining network business proves I was right, IBM wants out.

I have to say, it’s a surprise to me that this has happened so soon after I left and I didn’t know anything about it, I found out today. I’m not going to give away any of the facts as to the numbers involved of either people or dollar size of the deal. I was the Business Operations Manager for Europe and worked at a Global level both on people numbers and the ABA, the Annual Base Adjustment and the soon to be replaced MSA, so I know the numbers.

My opinion is this is a great deal for the network guys, they now work for a huge networking company and it’s a real chance to grow network skills and experience. I’m not sure it’s a great deal for IBM’s customers as I don’t know whether all new network requirements will go to AT&T or whether they’ll go out to tender and companies like Orange can compete for them.

All in all, I’m stunned and pleased, I wish the guys all the best and welcome to telco land.

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