IBM and Dell in another $6 b. deal

IBM won another multi-billion service contract from Dell Computer, which will pay IBM $6 billion over the next seven years to service high-end PC and server systems and networks Dell sells to customers in the United States and elsewhere.

Dell will offer comprehensive system and network installation, service and maintenance programs that will be performed by IBM’s services business. Earlier this year, Dell and IBM signed a $16 billion deal under which IBM will provide Dell with disk drives and other system components. For Dell, the key part of the new agreement is that by using IBM’s expertise in the area of high-performance Unix-based computers, Dell will be able to expand its growing interest in Linux and other Unix-based network servers that are able to far more reliably operate enterprise computer network than the Windows NT networking OS from Microsoft.

Dell's services revenues are projected to increase to as much as $10 billion. But the demand for computer services is getting to be far more complicated than Dell can handle, so it is allowing IBM to do the work for it. IBM and Dell will offer the combined services to U.S. customers initially, and expand it globally next year.