IBM showed it can compete with foreign outsourcing companies, winning a key share of a $2.2 billion deal from ABN AMRO Bank of the Netherlands. IBM will run the bank’s main data centers, develop applications and manage bank employees’ desktop, laptop and handheld computers, the bank announced Thursday. It will lay off about 1,500 staff and outsource its IT operations worldwide in a series of deals.“What we tried to realize first and foremost is saving cost,” the bank’s chief information officer, Lars Gustavsson, told analysts and reporters in a confer-ence call, according to IDG News Service. “The second thing is to get better and earlier access to new technology,” he said. The bank also struck application development deals with Accenture Ltd. of Bermuda and three Indian companies – Infosys Technologies of Bangalore, and Tata Consultancy Services (TCS) and Patni Computer Systems, both of Mumbai. Infosys and TCS will also provide application support, the ABN said. The deal shows that top line U.S. technology companies can compete well with foreign outsourcers, said Rob Enderle, president of the Enderle Group. “It cer-tainly showcases the fact that IBM retains the skills to put together complex deals and maximize their resources, combined with third party resources to cre-ate a compelling and cost effective solution. It’s the direction (IBM CEO) Sam Palmisano wants to take the company. “There has been some pull back (from exclusively foreign outsourcing deals) for a while,” Enderle added. “We are reaching appoint where blended solutions make sense.” The deal form part of ABN’s Group Shared Services program, announced last year. “The agreements with selected vendors allow us to utilize the latest tech-nology to further improve the services we offer our clients. We expect that this IT program that is shared across the Group will contribute to the savings in line with earlier estimates made by the bank, while improving IT services within the Group,” Hugh Scott-Barrett, Chief Operating Officer, said in a statement. Some the savings will come from payroll reductions: ABN will retain 1,800 full-time IT staff, transfer 2,000 to the five IT vendors and lay off around 1,500 others over the next 18 months, it said. A majority of the transferred staff will move to IBM, ABN said. The bank is consulting employee representatives around the world about the outsourcing deals, and must obtain regulatory approval before the transfers can go ahead, it said. Under the latest deal, ABN will retain control of some IT functions, Gus-tavsson said. “We are still keeping 1,800 people and these people will predominantly be employed working with vendors, writing specifications and testing solutions,” he said, adding that in addition to vendor management, the company would also re-tain control of information security and telecoms management. “The bank will decide technology strategy with the vendors but final respon-sibility remains with the bank,” Gustavsson said. Technology Industry