IBM Wednesday said it had inked a US$2.5 million managed services deal that would provide Delhi Stock Exchange with business continuity, disaster recovery, remote hosting and IT infrastructure management capabilities.
The 10-year IT services agreement will provide DSE, one of India's leading stock exchanges, with a range of services to help it meet "stringent guidelines" set forth by the Securities and Exchange Board of India (SEBI). DSE will take advantage of IBM's operational expense, or opex, model and pay for services as it consumes them, enabling it to engage with IBM with no capital expenditure on IT.
According to the terms of the services contract, IBM will build, host and manage the disaster recovery infrastructure for DSE and provide 24x7 monitoring services for hardware and network devices from its "command center."
The deal with IBM could help the Indian exchange resume operations after six years of inactivity. DSE, which has been in existence for 60 years, had to halt operations in 2002 due to "negligible trading volumes," with more than 2,800 companies listed. The opex model enables DSE to sign on for services without investing in IT upfront, which exchange executives could help it more quickly re-establish itself as a stock exchange in India.
"As DSE looks to claim back its position as one of the country's leading stock exchanges, the agreement with IBM couldn't have happened at a better time," said H.S. Sidhu, executive director and CEO of DSE, in a statement. Added DSE Chairman Vijay Gupta: "IBM's strong value proposition of providing managed services in an opex model was also one of the key reasons why DSE decided to choose IBM for this strategic relationship."
The financial details of the DSE contract align with industry watchers' predictions that outsourcing deals would shrink during the recession, but the duration shows some clients are committing to long-term outsourcing deals. IBM earlier this year announced it had signed an IT services contract with Whirlpool and added a 65-month agreement for outsourced IT services with Campbell's Soup to its contract wins. IBM is currently leading the worldwide IT services market, with HP EDS following.