Shell Extends 1 Billion Euro deal with Deutche Telekom’s T-Systems

Shell Extends 1 Billion Euro deal with Deutche Telekom’s T-Systems

Bloomberg reports that the Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (NYSE:RDS.B) decided to extend its 1 billion-euro contract with Deutsche Telekom AG (ETR:DTE) (FRA:DTE)’s T-Systems for the company to continue to manage its data center infrastructure.

Shell’s contract renewal with Deutche Telekom was not yet officially confirmed but the sources of the information were two individuals who have knowledge about the transaction. They requested that their names not to be mentioned in the report because both companies have not released their official statements.

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According to the sources, Shell agreed to extend its contract with T-Systems for the succeeding five years. Under the agreement, T-Systems will move Shell’s data to a cloud computing infrastructure to enable the company to access its information its information and services remotely. This will also relieve Shell from maintaining its own servers. T-Systems contract with Shell was first signed in 2008.

T-Sytems is encouraging its clients to divert to its new cloud services to lower their information technology expenditures and allow easy access to data and services. Last year, T-Systems reported 9.2 billion euros sales, a 16% contribution to its parent company’s revenue.

This year, T-Systems entered into an outsourcing agreement with several companies Old Mutual Plc (OML) and British American and Tobacco Plc. (BATS). Deutche Telekom’s internal computer and communications systems are currently transferred under T-System’s management. T-Systems is the largest cloud computing service provider in Europe and its operations are located in Debrecen, Hungary, St. Petersburg and the Czech Republic.