CSC Gets $500M Subcontract From IBM For Chase AccountCSC Gets $500M Subcontract From IBM For Chase Account

Computer Sciences Corp. says it will provide IT services to J.P. Morgan Chase & Co. under a $500 million subcontract awarded by IBM, Chase's primary services contractor. Under the terms of the seven-year deal, CSC will look after 4,000 servers that Chase uses to process financial transactions and will help IBM build new computing infrastructures for Chase.

CSC was previously Chase's primary IT contractor, having led an alliance of vendors that in 1996 was awarded a $2 billion services contract by the bank. Andersen Consulting (now Accenture), AT&T Solutions, and Bell Atlantic were the other members of the alliance. The deal expires this year.

In December, Chase tapped IBM as its lead contractor, awarding it a seven-year, $5 billion agreement. A spokesman for IBM says the company is farming out some work to CSC "to maintain continuity for the customer."

IBM is selling IT services to J.P. Morgan on a so-called "utility" basis. The bank's costs will vary based on its use of IBM's computing resources. To connect J.P. Morgan Chase's numerous computer systems, IBM will deploy its utility-management software and open-source middleware that can connect applications regardless of the platform on which they run.