AXA Group and IBM sign $1b on demand services contract.

AXA Group and IBM have announced a technology services agreement to enhance the performance and efficiency of AXA's global computing infrastructure.

The deal is worth approximately $1 billion over a six-year term, with options to extend. AXA expects to save several hundred million dollars over that time.

Effective immediately, IBM will begin integrating AXA's server, mainframe and storage systems under an on demand computing structure, capable of driving business innovation and transformation at the financial services company.

Under terms of the contract, AXA will retain full management control of the IT infrastructure and AXA personnel with IBM providing on demand computing capacity. AXA will transition from a traditional fixed cost approach to one in which vital technology is accessed as a flexible, variable cost service. By moving to an on demand infrastructure with variable cost structures, AXA expects to achieve significant savings and respond more quickly to changing market conditions.

"We have chosen IBM because of their expertise in delivering innovative business and technology services that drive growth," said Claude Brunet, member of the Management Board, AXA Group. "This on demand infrastructure agreement prepares us for an increasingly competitive marketplace by giving us flexibility to adjust rapidly to changing business needs."

"IBM is committed to delivering innovation on behalf of its customers and we look forward to helping AXA take advantage of the best in on demand technologies and business services," said Doug Elix, senior vice president and group executive, IBM Global Services. "IBM will provide AXA access to the world's leading research and technology for an on demand operating environment that closely aligns with AXA's strategic business plans."

As part of the contract, IBM will help AXA consolidate its server, mainframe and storage infrastructure. AXA will pay for the capacity used on a per unit basis. The agreement also includes training support for AXA personnel and a dedicated AXA Innovation Team that will focus on delivering competitive advantage to AXA by driving innovation and transformation, while supporting the alignment of AXA's business and technology strategic plans.

To support AXA's future growth, IBM will optimize the company's worldwide computer systems and infrastructure into an open, flexible operating environment, providing skills and computing resources on an on demand basis. IBM will reallocate resources as necessary to ensure that IT priorities are aligned with AXA's business needs. AXA will continue to retain its core technology competencies, including information technology strategy, strategic technology relationships, the development and maintenance of applications and databases and the management of its businesses' technology portfolios.