AT&T has completed the US phase of its $US5 billion purchase of IBM's Global Network business and created a new business unit that combines the assets it acquired from IBM with existing AT&T network solutions business.
IBM Global Network contracts and US-based employees are now part of AT&T Global Network Services, based in Illinois and headed by Gary Weis, who served as general manager of IBM Global Network. The transfer of employees and contracts outside the United States will take place in subsequent phases throughout this year.
AT&T Global Network Services has been grouped with AT&T Solutions outsourcing and professional services business and AT&T Solutions Information Technology Services to make up the newly formed AT&T Solutions Group, company officials said in a conference call last week.
"Aligning this unit alongside our traditional AT&T Solutions and internal AT&T IT services unit makes for a nice combination," said Rick Roscitt, president and chief executive of AT&T Solutions.
Roscitt called the positioning of IBM Global Network in the solutions group "a very natural alliance for us". When the acquisition is complete, AT&T will gain a total of 5000 network professionals, bringing the number it has worldwide to more than 12,000, he said.
Merrill Lynch & Co, Bank One and publisher McGraw Hill are among the clients that AT&T takes over as a result of the transaction. AT&T aims to grow its professional networking services business, which brought in $1 billion in 1998, by 35 per cent annually, Roscitt said.
AT&T is off to a good start toward meeting that goal, according to Roscitt. The first quarter of this year saw a 51 per cent increase in revenue over the first quarter of last year, he said.
With the conclusion of the US phase of the deal, AT&T also takes over responsibility for IBM's global networking needs, including data processing and employee payroll and benefits.