T-Systems GmbH, the IT and network services arm of Deutsche Telekom AG, has extended one of its flagship contracts, adding a further two years to its infrastructure and network management deal with automaker DaimlerChrysler AG.
The two companies originally signed a three-year deal worth $1.2bn in August 2003, and the new contract sees it extended until 2008. The relationship between the two companies dates back to T-Systems’ acquisition of debis Systemhaus, the in-house IT services arm of DaimlerChrysler, back in 2001.
T-Systems operates DaimlerChrysler’s mainframe computers and client-server architectures running applications in areas such as customer support, vehicle development, production, sales and group controlling. T-Systems also manages its corporate network in Germany and the contingency network in Asia.
The deal is further evidence of increasing IT outsourcing activity by automobile manufacturers, as they aim to reduce operating costs in an increasingly tough marketplace. Just days before this deal was announced, General Motors announced a major overhaul of its IT procurement strategy, signing a number of five-year deals with suppliers including EDS Corp and IBM Global Services.