IBM and Siemens Win $9B German Contract

Under the 10-year agreement, the two corporations will revamp the Federal Armed Forces nonmilitary IT and communications

IBM and Siemens Business Services (SBS) have won a 10-year, €7.1bn contract to modernise the German Federal Armed Forces' non-military IT and communications.

IBM has been a supplier to the German military for almost half a century and this latest large agreement—known as project Herkules—will see IBM concentrate on central hardware and software such as data centres and applications including SAP and Lotus Notes, while SBS looks after decentralised systems including 140,000 PCs, 7,000 servers, 300,000 fixed line phones and 15,000 mobiles.

A new company called BWI Informationstechnik GmbH (BWI IT) has been created, 49.9 per cent owned by the German government, with the remaining 50.1 per cent split equally between IBM and SBS.

As well as managing systems and end user devices, the modernisation aspect of the deal means choosing industry standard software where possible.

PKI (public key infrastructure) will be used to send documents electronically in line with signature and encryption regulations.

A statement from the companies and the German government called the relationship the largest public-private partnership (PPP) in Europe. Almost three thousand German Federal Armed Forces' IT employees will work on Herkules.