IBM, AT&T Pact Shows Growing Need For E-Business Services

Such a partnership would not have made sense 10 years ago, but a recent agreement between East Coast behemoths IBM Corp. and AT&T demonstrates how much Big Blue has altered its products and strategies since the emergence of the Internet. New York-based IBM has singed a $450 million multi-year contract with New Jersey's AT&T that calls for IBM Global Services to use hundreds of thousands of sq ft of space in AT&T hosting facilities. Formerly known mainly for manufacturing office equipment, IBM will use AT&T's space and services to sell its e-business services. Target customers for this IBM initiative include large companies setting up businesses on the Web, dot-coms, e-marketplaces, and application service providers. "As enterprises -- especially those born on the 'Net -- sharpen their focus on core competencies, the demand for e-sourcing will continue to grow," says Doug Elix, IBM senior vice president and group director of IBM Global Services. "This agreement will strengthen our ability to meet customers e-sourcing needs, including basic collocation, fully outsourced Web hosting, and everything in between." IBM plans to begin working at AT&T Internet centers in New York, Chicago, and Phoenix by the end of this year, with six additional centers being added in 2001.