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How an Extended Agreement with Krungsri Will Help IBM

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Dec. 4 2020, Updated 10:42 a.m. ET

Agreement details

IBM (IBM) strengthened its ties with Thailand-based leading financial company Krungsri to help the financial company achieve its digital transition goal by building cloud-based infrastructure. On July 26, IBM secured the new deal worth $140 million for a period of five years.

As per the new agreement, the tech giant will offer its managed services across IBM’s mainframe z14, storage, servers, network, and ATMs.

Krungsri, which deals in 8.6M credit cards, sales, finance, and personal loans, entered into an agreement with IBM in 2012 to boost its infrastructure as a service. Last year, the financial company also performed a pilot project on the blockchain with the IBM Cloud Garage team.

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Driving the system hardware business

IBM’s mainframe demand continues to witness strong growth, mainly driven by the higher adoption of z14. IBM’s storage facility also returned to growth buoyed by demand for flash storage technology. In its second quarter, its system hardware revenue climbed 31% YoY (year-over-year) on a constant currency basis. In the chart above, we can see the growth in the company’s system hardware revenue in the last five quarters.

The higher adoption of cloud storage facilities from Amazon (AMZN) and Microsoft (MSFT) has affected IBM’s on-premises storage business. However, the company is gradually transforming its storage business with the launch of new flash storage technology and its hybrid storage platform, providing a highly secure environment to its clients. Such new facilities are helping IBM to drive its system hardware business.

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