IBM, state reach initial deal on data center contract

$863 million plan reworked to deal with service problems.

AMERICAN-STATESMAN STAFF

Updated: 5:12 a.m. Wednesday, Jan. 6, 2010

Published: 8:37 p.m. Tuesday, Jan. 5, 2010

The turnaround of the troubled $863 million data center contract between Texas and IBM Corp. has cleared its first major hurdle.

On Tuesday, state officials released an "agreement in principle" for restructuring the contract to consolidate the data centers of 27 state agencies into two streamlined and upgraded facilities. The agreement provides a broad framework for hammering out a final deal by late February.

The mammoth data center project, launched in 2007, has been bedeviled by delays, equipment failures and poor service. State agencies involved in the project had raised more than 800 issues with the contract and the service they have been getting from IBM.

Last fall, state officials fretted that the deal with IBM could fall apart, said Karen Robinson, interim executive director of the Department of Information Resources, the state agency overseeing the contract.

But she said the new agreement provides a clear assurance that IBM and the state would be sticking it out together.

"IBM came to the table and worked closely with us on this," Robinson said. "These are principles that they can agree to commit to."

Details are scarce in this early agreement, and the next step will be to negotiate the nuts and bolts of the modified contract, including narrowing the scope of IBM's responsibilities.

One possible change could be that IBM will no longer maintain the thousands of remote servers across the state.

Turning that responsibility back over to the agencies may be cheaper, more efficient and fall in line with the agencies' wishes, the agreement says. It would also free IBM from some its most persistent and costly problems.

But those kinds of fundamental changes in responsibilities could also change the price tag, said Ed Swedberg, the new deputy director of data center services with the state's Department of Information Resources.

"We are not going to pay them for work they do not do," Swedberg said.

IBM said in a statement that the framework was an important step toward upgrading the state's data centers.

"IBM remains committed to working in partnership with (the department) and the agencies to build upon its progress in improving the efficiency and security of the state's IT operations," said Brian Whitfield, general manager of IBM's public sector division.

The state agencies for the first time had a significant voice in the negotiations. Swedberg said that new ownership role for the agencies, which have been the chief complainers about the project, means that they are also on the hook for getting it done.

kalexander@statesman.com; 445-3618