Electronic payment systems software provider ACI Worldwide has announced a seven-year agreement to outsource internal IT services to IBM.

As part of the deal, IBM will provide ACI with global infrastructure services including management of mainframe, storage and related server platforms, data network monitoring and management, and end-user support services.

For its part, ACI will retain responsibility for its security policy management and on-demand business operations.

The deal is estimated to deliver ACI operating cost savings of $25 million to $30 million over the course of the contract, providing the company with advanced technology and enhanced service capabilities.

David Morem, senior vice president of global business operations at ACI, said, "This agreement allows ACI to focus on its core competence in developing, delivering and supporting payment solutions for our customers.

"By outsourcing infrastructure management to IBM, we can leverage their worldwide resources to consolidate our datacentres, upgrade hardware and software, and standardise on proven tools and processes to improve our operational performance in our on-demand business and IT infrastructure.

"IBM will bring enhanced disaster recovery capabilities and more stringent security standards to our IT systems, reducing our risk exposure, and provide an IT foundation that can grow very cost-efficiently as ACI's global business expands."

Philip Hausler, vice president for the banking industry at IBM Global Technology Services, said, "This agreement reflects the broad range of services IBM can offer to help customers maximize their efficiency and leverage modern technology. We look forward to serving ACI and adding value to their worldwide business."

The deal will include incremental cash costs of approximately $4 million in severance expenses, transition costs and professional fees in 2008 and is expected to be cash-positive for ACI due to a decrease in capital expenditures.

In addition, ACI expects to incur up to $5.5 million of transition-related charges in 2008 for which cash payment will be deferred and paid out in periodic installments in years 2009 through 2012.