AT&T says it will “transition” its managed applications and managed hosting services to IBM in a deal announced Thursday after the markets closed. IBM will gain data space in AT&T data centers, but AT&T will keep networking and cloud services.
Financial terms were not disclosed.
No information was provided as well about how the deal will affect employees for both companies.
The firms described the deal as one that is “expanding their long-term strategic relationships.”
Here’s how they explained the deal:
“Under the agreement, AT&T (NYSE:T) will transition its managed application and managed hosting services unit to IBM (NYSE: IBM). IBM will then align these managed service capabilities with the IBM Cloud portfolio. IBM will also acquire equipment and access to floor space in AT&T data centers currently supporting the applications and managed hosting operations.”
Once the deal closes, IBM “will deliver the managed applications and managed hosting services AT&T provides today.”
However, AT&T is to retain networking services such as security, cloud networking and mobility.
Financial news website SeekingAlpha reported that IBM’s global technical services revenue dropped 10 percent year-over-year to $7.9 billion in the third quarter but global business services revenue grew 13 percent to $4.2 billion.
AT&T, meanwhile, said revenue for services including hosting, cloud, security and virtual private networks rose 12,6 percent year-over-year in the third quarter to $2.76 billion.
“Today’s announcement represents an expansion of our strategic relationship with AT&T and continuing collaboration to deliver new innovative solutions,” said Philip Guido, IBM General Manager of Global Technology Services for North America. “Working with AT&T, we will deliver a robust set of IBM Cloud and managed services that can continuously evolve to meet clients’ business objectives.”
Jon Summers, senior vice president, AT&T Mobile and Business Solutions, said the agreement “is a natural expansion of our relationship, and it demonstrates our continued commitment to serve customers based on our respective strengths and capabilities.”
