IBM bags $700m services and infrastructure contract with Etihad Airways IBM has signed a $700m deal with Etihad Airways to provide IT services and infrastructure over the next 10 years. Big Blue's agreement includes the development and operation of a cloud data centre in Abu Dhabi, the capital of the United Arab Emirates, for which state-owned Etihad Airways is a flag carrier. IBM stated that its …
For the most part, airlines outsource all or most of their IT to providers. It's very rare for an airline to still be running its own passenger processing systems, for example. My experience, on both sides of the equation, is that the boundary created between the outsourcer and the airline reduces the level of innovation, because the focus is on delivering the same services for less money, while allowing the outsourcer to make a profit. That's the same everywhere, but even more so for airlines. Despite the fares and fees they charge, airlines are extremely thin-margin businesses and notoriously cheap when it comes to IT especially.
I'm surprised they picked IBM. Don't most CIOs know already that outsourcing deals with IBM have been pretty toxic lately? It's been decades since "no one got fired for buying IBM" has applied.
Yes and no, IBM or not, but I think you have not understood how integrated the air traffic has become. It's not like running trains in one country or some other, or buses or ships. Airliners cannot and should not do it all by themselves, And if not IBM, who then, Microsoft, Oracle, HP, SAP, Accenture, Facebook, Google, Apple. Those guys are not stupid, which is good for us. Slightly pissed off perhaps knowing there are no other better solution.
Sales 101 - hunt for new business opportunities within your existing client base, let's face it being in the business for over 100-years with a pretty big installed base, it's hard for them not to be considered as the TRUSTED ADVISOR to many enterprises and governments it serves around the world and by all accounts potentially keeps out the competition for another 10 years!
What's not mentioned here is that Etihad's core reservations system (aka PSS) is outsourced to Sabre, and the operations of that system are - in turn - outsourced to HP (formerly EDS). It all runs in a hole in the ground in Tulsa, Oklahoma. Etihad was on Amadeus, but switched about 3-4 years ago. IBM doesn't play in the reservations space and it will be interesting to see what services can be built on top of the core PSS.
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