Global Network Deals: AT&T, IBM, and More

Strategic Insights -

AT&T's acquisition of IBM's data network for a staggering $5 billion has set off a chain reaction of high-stakes deals in the global telecommunications industry. This deal provides AT&T with a vast global data infrastructure, a plethora of corporate customers, and over a million individual internet users. As part of the agreement, AT&T will provide network services to IBM, while IBM will manage many of AT&T's core computer systems.

Key Takeaways:

  • AT&T buys IBM's data network for $5 billion, gaining access to a global data infrastructure and a large base of corporate customers.
  • The deal includes a cross-outsourcing arrangement, where AT&T will provide network services to IBM, and IBM will manage AT&T's core computer systems.
  • SAP's sales problems in Japan will lead to lower-than-expected profits, despite overall growth of 15% and total sales of $8.4 billion.
  • Sema wins a $300m contract to run the systems for the Olympic Games from 2001 to 2008, following IBM's decision to pull out.
  • Siemens and 3Com form a $100m joint venture to develop voice-over-data technology, expected to grow to $4 billion within three years.
  • Cisco buys Pipelinks, a developer of routers for voice and data transmission, for $126 million.
  • Four major companies - Alcatel, Microsoft, DirecTV, and NEC - invest $56.25 million each in Thomson Multimedia, with the French government holding a majority stake.
  • Novell buys a $1 million minority stake in Edinburgh-based Orbital Software, an internet search specialist.
  • Global TeleSystems acquires Esprit Telecom for $456 million, creating a network of 9,200km of high-capacity fibre cable.
  • Microsoft invests $200 million in Qwest, a US broadband network developer seeking to become a leading internet carrier.

Statistics:

  • $5 billion: The price AT&T paid for IBM's data network.
  • $8.4 billion: SAP's total sales, 40% higher than the previous year.
  • 15%: The overall growth of SAP's profits, lower than previously expected.
  • $300m: The value of Sema's contract to run the Olympic Games systems.
  • $100m: The value of Siemens and 3Com's joint venture to develop voice-over-data technology.
  • $126 million: The price Cisco paid for Pipelinks.
  • $56.25 million: The amount each of the four major companies invested in Thomson Multimedia.
  • $456 million: The value of Global TeleSystems' acquisition of Esprit Telecom.
  • 9,200km: The length of high-capacity fibre cable owned by Global TeleSystems and Esprit Telecom.
  • $200 million: Microsoft's investment in Qwest.

Sources:

  • "AT&T buys IBM's data network for $5 billion"
  • "SAP sales problems in Japan set back profits"
  • "Sema wins $300m Olympic Games contract"
  • "Siemens and 3Com form $100m joint venture"
  • "Cisco buys Pipelinks for $126 million"
  • "Four companies invest $56.25 million each in Thomson Multimedia"
  • "Novell buys minority stake in Edinburgh-based Orbital Software"
  • "Global TeleSystems acquires Esprit Telecom for $456 million"
  • "Microsoft invests $200 million in Qwest"