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AT&T in $17M Networking Pact May 28, 2002
By @NY Staff
AT&T has pocketed a $17 million networking contract with Heidelberger Druckmaschinen AG, one of the world's largest technology providers to the print media industry.
The arrangement means that AT&T's managed services division will be helping the German media and tech company consolidate telecommunications services currently provided by more than 30 providers, the companies said.
The three year agreement calls for AT&T to provide a fully managed global wide-area network (WAN) service to the company, including connecting to 150 Heidelberg locations in Europe, Asia Pacific and the Americas. In addition, AT&T is to be the main ISP for the company which includes a three-year project to migrate Heidelberg's current network, based on global Frame Relay technology, to the latest IP based Multi Protocol Label Switching (MPLS) infrastructure. This is the largest aspect of the project, estimated to cost $12 million.
On top of that, AT&T said it would be hosting and managing all of Heidelberg's AT&T local service, long distance, teleconferencing, video-conferencing, frame relay and private line services in the US. The service arrangement alone is worth about $5 million.
The bottom line for the deal is to help Heidelberg cut and manage its costs. The three year contract with AT&T is expected to shave about 40 percent from it. AT&T has also put its research division on notice with the deal as well, in order to enable the two companies to commit to future technology developments related to Web services and e-commerce.
With 25,500 employees in over 170 countries, Heidelberger has big plans to build a cutting edge global network and has spent the past few years investing in enterprise resource planning, supply chain management, and customer relationship management systems. Now, the goal is to knit the systems together more effectively.
The contract is also a big win for AT&T's managed services division, which is seen as one of the company's biggest revenue drivers, especially after AT&T spins out its broadband division and merges it with cable company Comcast.
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