140 jobs go at ICMS Petone plant

By ADAM GIFFORD

IBM is to lay off 140 staff at its ICMS software development facility in Petone.

The company said Colorado utility billing software company CSG Systems, which bought the ICMS product in August, had decided not to take up its option of contracting the Petone team for global support.

It will be a blow to the Wellington job market, which is already reeling from layoffs at EDS and the imminent departure of Fonterra.

IBM said about 100 staff would finish at the end of the month, and 40 other technical staff would stay on until late January completing contingency work on the latest version, Release 5.2 and other technical projects. A few would be redeployed.

"IBM remains committed to a strong presence in New Zealand," said Nick Lambert, IBM New Zealand managing director.

"These actions do not impact on the day-to-day operations of IBM in New Zealand and will have no impact on the levels of service experienced by IBM clients or business partners in New Zealand."

At the time of the ICMS sale, IBM said the move was in line with its global strategy to quit the specialised application development market.

ICMS (Integrated Customer Management Solution), a specialised telecommunications billing system which runs on the IBM iSeries (formerly AS/400) server platform, was initially developed jointly with Telecom New Zealand in the early 1990s.

IBM marketed ICMS around the world, and it had about 35 cable, mobile and fixed telephony customers when it was sold.

While the price paid to IBM was not disclosed, industry analysts suggest it would have struggled to get more than US$50 million for the software and maintenance contracts in today's shellshocked telecommunications market.

This year CSG bought the Kenan suite of Unix-based customer care and billing applications from Lucent Technologies for US$250 million. Kenan has about 200 users, including Telecom. Lucent bought Kenan in late 1998 for more than US$1 billion.

Given the tough market and the perception of ICMS as an end-of-life product, it now seems that what was more important to CSG about the August deal was the global agreement to make the Kenan billing platform and other CSG software run on the IBM pSeries Unix servers.

IBM also agreed to promote CSG products to its customers worldwide, and the two companies were to work together on customer care and billing outsourcing opportunities that require data hosting centre facilities in Europe, the Middle East, Africa and Asia-Pacific.

Before it set off to grow through acquisition, CSG Systems sold a mainframe-based customer care and billing application.

CSG Systems