French insurance group AXA has signed a six year technology services contract, worth $1bn, with IBM.
IBM says it will begin integrating AXA's server, mainframe and storage systems under an on demand computing structure.
AXA says it expects the move to an on demand infrastructure to cut costs. The insurer will pay for the capacity used on a per unit basis.
Under the terms of the contract, AXA will retain full management control of the IT infrastructure and AXA personnel.
Claude Brunet, member of the management board, AXA Group, says: "This on demand infrastructure agreement prepares us for an increasingly competitive marketplace by giving us flexibility to adjust rapidly to changing business needs."
The agreement also includes training support for AXA staff although the insurer will continue to retain its core technology competencies, including IT strategy, technology relationships, the development and maintenance of applications and databases and the management of its businesses' technology portfolios.