JP Morgan Chase signs $5 bn outsourcing agreement with IBM

JP Morgan Chase & Co recently finalized with IBM a ground-breaking

seven-year outsourcing agreement, in excess of $5 billion, the largest of its

kind. The agreement will enable JP Morgan Chase to transform its technology

infrastructure through absolute costs savings, increased cost variability,

access to the best research and innovation, and improved service levels. By

moving from a traditional fixed-cost approach to one with increased capacity and

cost variability, JP Morgan Chase will be able to respond more quickly to

changing market conditions.

JPMorgan

Chase will outsource a significant portion of its data processing technology

infrastructure, including data centers, help desks, distributed computing, data

networks and voice networks. The agreement includes the transfer of

approximately 4,000 JP Morgan Chase employees and contractors as well as

selected resources and systems to IBM in the first half of 2003. Application

delivery and development, desktop support and other core competencies will

largely be retained inside JP Morgan Chase.

"We view technology as a key competitive advantage. Our agreement with

IBM will create capacity for efficient growth and accelerate our pace of

innovation, while reducing costs, increasing quality and providing exciting

career opportunities for our employees," said Thomas B. Ketchum, Vice

Chairman, JP Morgan Chase. "IBM’s global strength and computing

capabilities, delivered ‘on demand’, will help us create significant value

for our clients, shareholders and employees."

IBM Global Services and JP Morgan Chase are creating a virtual pool of

computing resources that will be accessed and deployed as needed. The underlying

technology, developed by IBM Research, is called Utility Management

Infrastructure (UMI). UMI uses advanced software based on open standards to tie

together disparate back-end systems, such as different brands of servers and

storage devices, without requiring new applications to be written for each

separate system. The technology also enhances the availability, reliability and

security of IT infrastructure.

"We’ve invested heavily in Research and Development to create ‘on

demand’ technologies that will dramatically change the way IT is

delivered," said Doug Elix, Sr VP and Group Executive, IBM Global Services.

"JPMorgan Chase will be receiving a continuous infusion of technology and

business process innovations from IBM Research."

JP Morgan Chase & Co. is a leading global financial services firm with

assets of $742 billion and operations in more than 50 countries. The firm is a

leader in investment banking, asset management, private banking, private equity,

custody and transaction services, and retail and middle market financial

services. A component of the Dow Jones Industrial Average,



JP Morgan Chase is headquartered in New York and serves more than 30 million
consumer customers and the world’s most prominent corporate, institutional and

government clients.

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