Cendant and IBM Sign $1.4 Billion Pact

Cendant Corporation and IBM announced they have formed a ten-year, $1.4 billion IT services relationship that will provide Cendant with the data operations and processing foundation it requires to provide the highest quality services to its customers and support its future endeavors.

With Cendant`s strong presence in the travel industry, the agreement covers a full spectrum of services related to airline, car rental, hotel, and leisure companies, including Galileo International, which Cendant acquired earlier this year. Galileo`s electronic global distribution system (GDS) is among the largest systems of its kind, connecting approximately 44,000 travel agency locations to 500 airlines, 40 car rental companies, 47,000 hotel properties, 370 tour operators, and all major cruise lines throughout the world.

Additional Cendant travel units utilizing services related to the agreement include Avis Rental Cars and Ramada, Days Inn, Motel 8, and Howard Johnson Hotel chains, as well as vacation travel companies such as Resort Condominiums International (RCI) and Fairfield Properties. The deal also includes Cendant`s Coldwell Banker, Coldwell Banker Commercial, ERA, Cendant Mortgage, Century 21, and Cendant Mobility units.

IBM Global Services will manage IT data operations for Cendant`s 40-plus business units—including Galileo`s GDS—from Cendant`s data center in Denver. IBM will run Cendant`s 1,400-plus computer servers and host many of the Web sites and interactive services operated by the corporation`s brands. Among these are Avis Rental Car, RCI, and many others. IBM will also assume responsibility for IT data operations of third-party companies that are currently outsourcing these functions to Cendant. In sum, the IT infrastructure IBM will manage represents approximately 13,000 MIPS of computer processing power.

Cendant has also selected IBM to provide both help desk and desktop support services to thousands of its employees. The help desk services—which will be provided to Cendant`s Avis, Wizcom, and real estate businesses—will be delivered from an IBM Global Services facility in Toronto. IBM will provide the desktop support services on-site to thousands of employees at Cendant`s corporate offices and several remote locations.


About 500 Cendant employees will join IBM Global Services as a result of the agreement.