From pills to planes, it looks like IBM is continuing its recent trend of landing mega IT outsourcing deals. From pills to planes, it looks like IBM is continuing its recent trend of landing mega IT outsourcing deals. The company said today that it has signed a seven year deal with Delta Air Lines to “help support (Delta’s) ongoing IT needs as it restructures its operations and progresses toward emergence from bankruptcy in the first half of 2007.”Now God only knows what ‘IT needs’ declaring bankruptcy creates. IBM said it will be providing IT mainframe and mi-range services, allowing Delta to “oursource (its) IT infrastructure management.”) This news comes just a month after IBM and CVS Pharmacy announced a huge, 10 year BPO (business process outsourcing) deal that put CVS’s HR department under IBM’s control. The common theme? IT is expensive, and companies both healthy and ailing are increasingly looking for ways to defer those costs, or at least contain them. For Delta, this is all about reducing overhead and, I would guess, headcount. In the case of CVS, it was actually the company’s rapid growth — 55,000 U.S. employees in two years — that prompted the deal. “This rapid growth has stretched our current systems supporting human resources transactions,” V. Michael Ferdinandi, CVS SVP for Human Resources and Corporate Communications, said at the time that deal was announced. CVS was looking not only for cost efficiencies signing on with IBM, but for IBM’s expertise in hot areas like BPO to give it the technology to “improve human resources tools for our stores,” he said. But there are risks in these mega deals for all the parties involved. Seven and ten year outsourcing engagements are great for the balance sheet, but they also have considerable up front costs for IBM before it really begins to make money in the deal. And, as Big Blue learned with its $5 billion deal with JP Morgan a couple years back, and Sprint earlier this year, the longer the deal goes on, the more potential there is for *&$! happening — buyouts, mergers or general disenchantment that can shake up a rock-solid outsourcing relationship. Technology Industry