IBM counters Gen-i insurgency at Air New Zealand

It may have lost a battle but it has won the war.

IBM has renewed its technology services contract with Air New Zealand for five years – a deal worth tens of millions.

Under the agreement, IBM will provide new mainframe and virtual hosting services for the airline.

A month ago, things were looking darker for Big Blue.

On August 20, Air New Zealand took its secondary data centre business away from IBM and handed it to Telecom’s IT and telco services division, Gen-i.

NBR understands that Gen-i (which already has a telecommunications network services contract with the airline) was angling to further increase its business with the airline (although the mainframe hosting was not put up for competitive tender).

Gen-i got a foot in the door following a day-long data centre outage and ensuing ticketing chaos in October 2009.

The incident prompted Air New Zealand chief executive Rob Fyfe to send a blistering email to staff describing his frustration with IBM (sample line: “In my 30-year working career, I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologise to its client and its client’s customers.”).

Now, fences have clearly been mended.

The new agreement reflects “a further strengthening of the relationship between the two companies” IBM New Zealand managing director Jennifer Moxon said.

IBM has partnered with Air New Zealand for 13 years.

The company’s existing deal has two years left to run; with the five-year extension, IBM is safely on board for another seven years.

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