Army Signs With IBM (NYSE:IBM) for $135 Million In Cloud Services

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The stock of IBM Common Stock (NYSE:IBM) closed at $142.90 losing 0.64% in yesterday’s trading session. This company has been awarded a contract by the U.S. Army’s Logistics Support Activity (LOGSA). It made the announcement today when it said that it will dedicate itself to offering the best to one of the federal government’s biggest logistics systems. The contract provides that the company will be entrusted with the provision of cloud services, cognitive computing and software development.

In September 2012, LOGSA signed a 33-month, $135 million contract with IBM. The army will pay only for those cloud services it actually consumes under this managed services agreement. Efficiencies associated with this arrangement have helped the army especially when it comes to cutting down on operational costs. It is possible to avoid about $15 million per year through cloud services which is a major yield for taxpayers and the army as well.

The US army has over a long period of time struggled with cyber-security and hopes that the company will help it towards improving in that area. To achieve that, IBM will be seeking to apply the risk management framework (RMF) security controls to LOGSA’s IT enterprise. Speeding application modernization and incorporating cognitive computing that enhances readiness through the anticipation of needs are some of the other strategies it will be taking up.

The managing director at IBM’s Global Business Services, Lisa Mascolo opined, “LOGSA and the Army can now take advantage of the technological innovation that cloud offers – especially cognitive computing and analytics – so that the Army can continue to reap cost savings, further streamline its operations and deliver services to its clients.”

The director added that as a company they appreciate the opportunity to work with the army because it was offering them the opportunity to demonstrate the viability of cloud for mission applications.

Under the new contract, it is expected that LOGSA will be boosting its ability to offer the prescriptive and predictive maintenance information to the army. IBM has been facing great competition from rivals and has been laying down strategies to counter that.

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