MDS Inc. grows IBM relationship via outsourcing deal

An international health and life sciences company is turning to Big Blue’s services team to manage its infrastructure as it nurtures its growth strategy.

MDS Inc. Tuesday said it had signed a seven-year global technology services

outsourcing agreement worth $265 million with IBM Canada whereby it would take over its PCs, servers, helpdesk and network. Seventy-eight MDS employees will move over to IBM in North America as part of the agreement, according to IBM.

Alan Torrie, MDS’s executive vice-president of global markets and technology, said MDS wanted a common IT platform and a secure partner that would allow it to continue both internal growth and new acquisitions without being distracted by technology intricacies that aren’t its core focus.

“”We had, through various acquisitions, many different component parts of the infrastructure that were duplicated,”” he said. “”We would have multiple data centres around the world which we could certainly consolidate. We had multiple help desks . . . it was more on that basis than the applications.””

Greg Gulyas, vice-president sales and marketing for IBM Global Services, Canada, said the deal would include MDS’ health sciences and life sciences groups as well as its corporate head office.

“”They were spending what I think in the final analysis they deemed to be an excessive amount of management time integrating those things, managing that complexity,”” he said. “”They would rather spend that time on growing their business and working with their customers.””

The IBM relationship, which stretches back in various forms over several years, will allow MDS to speed the rate at which it can integrate newly acquired firms, Torrie said. Senior members of the company’s IT staff will manage the relationship, he said.

“”We’ll be able to spend more time leveraging our thoughts about how we use knowledge and information in the organization because we’re spending less time having to run it on a day-to-day basis,”” he said. “”Health and life sciences is very much a knowledge-based industry and keeping on top of that is a real priority for us.””

Gulyas said there was considerable scope to expand the agreement over the next seven years.

“”There are a number of life sciences unique things here we had to understand and work with MDS on, but this deal is essentially an infrastructure deal,”” he said. “”I think you’ll see us use this outsourcing deal that’s being announced today as a stepping stone to other changes in their business that gets us closer into the application arena as well.””

IBM has also shown considerable interest in developing products for the life sciences industry, which last year accounted for one per cent of its total revenue. Big Blue executives have said biotechnology companies will spend, per employee, three to four times more on computing and other networking and IT infrastructure than any other industry.

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