Texas inks data center pact with IBM

Texas has awarded a data center outsourcing deal worth an estimated $863 million to IBM Corp.

Under the contract, which could stretch for 10 years, IBM will build a new data center in the state capital of Austin as well as upgrade facilities in San Angelo, the state announced today.

Texas employees who work on data center services will be offered jobs with IBM or its teammates, Unisys Corp., Xerox Corp. and Pitney Bowes Inc. All state employees who take the offer will receive a 5 percent increase in pay.

Under the new contract, IBM must funnel 20 percent of the work to historically underutilized businesses. Twenty-seven state agencies also are participating in the project.

Texas officials said the state should save $25 million in 2008-09. Savings over the seven-year period should reach $159 million. The contract also has a three-year option.

Nick Wakeman is the editor of Government Computer News' affiliate publication, Washington Technology.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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