back to article Lloyds finally inks mega 10-year cloudy outsourcing deal with IBM

Lloyds Bank has today inked a mega 10-year cloudy outsourcing deal with IBM, with 1,500 staff and contractors to be shipped over to Big Blue - according to internal memo seen by The Register. The bank has been negotiating with IBM to outsource the management of its bit barns to IBM for many months, as we exclusively revealed …

  1. wolfetone Silver badge


    Are they close enough to each other to mean travel will be under £75?

    1. Joseph Haig

      Re: Hmmm

      Maybe they can cram enough people into a helicopter to make it less than £75 per person.

    2. MyffyW Silver badge

      Re: Hmmm

      Is that the same IBM with which RBS cheerfully splaffed £1.2 billion before failing to separate it's England and Wales branches?

      Thankfully the tax payer isn't on the hook for this one... yet

    3. Roland6 Silver badge

      Re: Hmmm

      Bit behind the times wolfetone :) travel needs to be under £0.

      So suspect in the first instance transferred staff will remain at their normal place of work.

    4. Ian Michael Gumby

      Re: Hmmm

      That sort of client travel is permitted and isn't normally an expense.

      That's where the work is being performed. Its the non-billable expense that has been hit.

      The issue though is that these guys and gals will do the heavy lifting and train their replacements where they will then fade away to find a new job.

      Lloyds just made their systems worse and they don't even care because the bean counters can show the savings to the bottom line as long as things go smoothly.

  2. Anonymous Coward
    Anonymous Coward

    Exit strategy

    All Lloyds staff should prepare to leave by the nearest exit immediately.

    1. Anonymous Coward
      Anonymous Coward

      Re: Exit strategy

      In preparation for your first IBM meeting once you've officially transitioned:

      "90% of your roles will be off-shored in the first two years - we want you to help moves these roles off-shore via knowledge transfer and we will help you to move to another exciting part of our business. The regular resource actions you hear about are just because we are a large company, and won't affect you."

      If you are a permanent staff member, get out while you only hate Lloyds and IBM and can move to another role before IBM sucks out your will to live. Take redundancy if it is offered but expect to get the statutory minimum once you're on IBM's payroll. Ignore any promises they make about protecting T&C's unless there are enough of you to fight a proper employment case against them..

      Contractors - take the risk of staying, but when they discover they don't need you, your contract will be rolled over in the last week before it finishes until you are arbitrarily terminated. Christmas is always a good time to make sure IBM's quarterly numbers stack up...

      The rest of Lloyds? Hopefully accountants will deliver any necessary innovation in your company, because your new IT out-sourcer doesn't have any IT staff that can actually help your business.

      The good news is that you if you don't sign the TUPE agreement, you can walk out without a statutory notice period and the gut wrenching realisation of what working for IBM GTS is actually like....

      1. Korev Silver badge

        Re: Exit strategy

        Upvoted with sadness...

  3. Locky

    10 year deal

    That's 4 years of transition, 2 years of legal discussions and 4 years of bringing back in house.

    The time will fly by

    1. macjules

      Re: 10 year deal

      "The time will fly by"

      Depends upon whether they get to use Ginnie's helicopter I suppose.

    2. jMcPhee

      Re: 10 year deal

      Will IBM survive another 10 years? They don't have that much left to sell off.

    3. Anonymous Coward
      Anonymous Coward

      Re: 10 year deal

      4 years of bringing back in house

      Sadly, if they're stupid enough to believe the promises of an outsource salesman, then when they find they're getting rubbish service from IBM, they'll believe the siren voices of other outsourcers, and they won't bring it back in house, they'll move to Wipro. TCS, HPE or similar, and wonder why the same thing happens.

      1. the J to the C

        Re: 10 year deal

        This would seem a better outsourcing model than they already had in place, the gate is open and the horse in now in beef burgers somewhere

  4. Putters

    SNORK !

    "It said controls and mitigation plans have been established to offset the risks of outsourcing everything to IBM's private cloud"

    SNORK !

  5. Anonymous Coward
    Anonymous Coward

    if i were a customer, i'd run... now.. very quickly ...

    1. Doctor Syntax Silver badge

      "if i were a customer, i'd run... now.. very quickly ..."

      I was, I did...ages ago.

    2. Mark 110

      Run where? I was involved in another transition to IBM for another bank last year. It was . . . interesting . . . .

      Which bank is it that hasn't outsourced their core competency ?

    3. Anonymous Coward
      Anonymous Coward


      I believe I am a customer, I will first write a direct email to ask if this is the case, when they ignore it. I will close my account.

  6. Roger Kynaston

    We can look forward to the escuse

    When the service goes TITSUP (Reg definition) we can look forward to the CIO of the day stating that it has nothing to do with outsourced services and they are looking at how to mitigate the fact that they have just wiped out ten squillion current and savings accounts in a botched disk replacement operation.

    Beer because lots of it will be needed when the time comes.

    1. Anonymous Coward
      Anonymous Coward

      Re: We can look forward to the escuse

      It'll undoubtedly occur immediately preceding some vague wording about "power supplies" and accidents..

  7. Anonymous Coward
    Anonymous Coward

    Contractors begone

    Having worked there for 8 years as a contractor I was surprised at how many contractors are there, of the 1500 staff being moved across 2/3rds are contractors, that was never a good model, that said there are some really good people there and it's a shame that some friends are going to have to move away from the bank after many years of service

    1. Mark 110

      Re: Contractors begone

      Thats not unusual when restructuring is planned. Permanent hires are forbidden and contractors used to fill the gaps. The bank I was working for last year only had 7/10 permanent staff across the whole organisation - not just in IT.

      1. Anonymous Coward
        Anonymous Coward

        Re: Contractors begone

        I was there for 8 years as a contractor, I know of others who have been there for over 10 years now

  8. Flakk

    Uh Huh

    It said controls and mitigation plans have been established to offset the risks of outsourcing everything to IBM's private cloud.

    Brave, brave words.

    1. Anonymous Coward
      Anonymous Coward

      Re: Uh Huh

      "It said controls and mitigation plans have been established to offset the risks of outsourcing everything to IBM's private cloud."


      We have a few easy wins that will guarantee that we get our year 1/2 bonuses and that IBM can show there cloud business is growing. Everyone wins! After 2 years, we're off to outsource another company and leave the actual work to someone brave or stupid enough to continue.

      As for the IBM private cloud, Lloyds will be pleased to get rid of their expensive legacy DC's and instead use IBM's expensive legacy DC's, only without the ability to control costs or their direction. IBM have ensured that the contract adequately protects them against customer outages.

    2. Anonymous Coward
      Anonymous Coward

      Re: Uh Huh

      Yup. 'Private Cloud' being 'Z Cloud' - being the 1960s Bureau Computing model. All owned, run, and operated by Big Blue, but this time around deploying the cheapest available global labour as their service minions.

      What could possibly go wrong?

      Ahh, the journey to the cloud. They'll be talking about virtualistaion, software defined, SAN etc on the mainframe next.....ohhh, wait a minute.

      This is progress? ;-)

  9. Anonymous Coward
    Anonymous Coward

    "Upto date technology on Demand" .... and they went to IBM

    I know one large UK retailer who went to IBM for their web presence and were stuck with WebSphere as IBM would not entertain any thing else. All the web bods hated it, some left and it promptly failed for 2 x black friday's.

    as the outsourcing wont take 4 years to move to India - give it a less than a year (unless it is written into their contracts) and they will have their jobs moved.

    contractors - doubt they will be there in 6 months

    1. Mark 110

      WAS - yes - remember that from last year. Wasn't that stable. IBM couldn't configure it correctly, particularly the load balancing. Nightmares. How you manage to set your load balancing up to route traffic to nodes that have had their services stopped . . . .

      1. Anonymous Coward
        Anonymous Coward

        Re:Load balancing

        "How you manage to set your load balancing up to route traffic to nodes that have had their services stopped . . . ."

        That's easy! Oh, you didn't want that? It wasn't covered in the knowledge transfer...

  10. Jeffrey Jefferson

    See icon.

  11. Anonymous Coward
    Anonymous Coward


    In the unlikely event they hang around, damn right they should fear for their pension. All they need to do is google "Project Waltz" to see the kind of crap IBM has pulled already.

  12. f1rest0rm

    Saw this coming and got out in February. Got a lot of friends there still and none of them are enthused by this ... unsurprisingly.

    Hard to see it being anything other than a balls up.

    1. Anonymous Coward
      Anonymous Coward

      Upvote the fellow Escapee.

    2. GruntyMcPugh Silver badge

      So, help me with the history here,... I'm an ex-IBMer and I worked on LTSB systems when they previously had a contract with IBM. I only worked on Wintel platforms, so did IBM manage any other LTSB platforms? Have staff been TUPEd back and forth already?

      1. John Riddoch

        GruntyMcPugh - yes. HBOS outsourced to IBM many years ago (about 15 I think) and the staff were brought back in-house again (possibly after it became LTSB). Some of those staff are still there, so they'll have been employed by a few different companies (BOS, HBOS, IBM, LTSB, Lloyds) while still doing the same job.

  13. Steve Davies 3 Silver badge

    Transferred over?

    Carry on going right to India because that's where 90% of the Lloyds jobs will be this time next year.

    I would not advise any young person to go into IT these days. There is no future unless you can speak Hindi and your family comes from S. Asia. Then you would fit right in and become a manager in no time at all.

    1. Anonymous Coward
      Anonymous Coward

      Re: Transferred over?

      I wouldn't advise Indians to go into IT either. They are treated like dirt and the wages are shit, even for India, and anyone who is any good tries to emigrate to a Western country, where they generally find they are still treated like dirt, only slightly less so.

  14. Anonymous Coward

    So RBS' contractors are being moved to IBM, which has a policy of ending contracts in place

    So basically, nearly everyone who is caught up in this outsourcing and is not an RBS employee should be looking for new work.

    Plus the current RBS employees should probably also be looking for new work because once they are moved over to IBM they will find your average developed-world IBM employee has the career prospects of a mayfly.

    1. Velv

      Re: So RBS' contractors are being moved to IBM, which has a policy of ending contracts in place

      Either you're mixing up Lloyds Bank of Scotland with RBS, or you've insider knowledge about another outsourcing deal being worked

  15. a_yank_lurker

    Another one bits the dust

    So Lloyds wants to go under shortly after Big Moron croaks.

  16. stephanh

    nobody got ever fired for buying IBM?

    So last time we discussed IBM and big blue helicopters, several people wondered who in their right mind would still hire IBM given all the cost-cutting and penny-pinching at the expense of customer service.

    Well, I suppose we have our answer now.

    1. Mark 110

      Re: nobody got ever fired for buying IBM?

      My experience from last year. The bank board (PHBs?) had signed the contract without asking IT if everything they needed was in there. Looked like a good deal :-)

      Then they told IT and said get on with it. And IT said, well who is supporting the other apps? Who is doing the batch operations? Who is doing monitoring and alerting? Who is doing 24x7 DC ops? There were a few more.

      By the time all the CCNs had been raised for the stuff that should have been in the contract in the first place it was no longer such a great deal. Sigh! :-(

      1. This post has been deleted by its author

  17. Anonymous Coward
    Anonymous Coward

    I can tell you that no-one is doing the monitoring

    My old job was moved to IBM and shifted to India

    During the summer last year a DC was having issue - A local IT manager went into the DC and it was hot, he reported that and the "unhelpful desk" wanted to raise it as a P5 !

    At this time the 3PAR SAN started to fail (yes, IBM had stopped the maintenance contract) and it basically cooked its own disks and failed and so all the VM's were going down - fast

    Part of the investigation found that the netbots were indeed reporting the issue to the relevant mail account, but that was no longer being monitored by the IBM staff (these were not from those tuped over as we had all left bar a few managers) The netbot had reported temperatures of over 100c - and that is their limit.

    They lost a lot of VM's as they then found out that the backups had not worked since the December ! when the contractor doing the job left - he had handed over, but no-one in IBM knew CommVault.

    1. Anonymous Coward
      Anonymous Coward

      I wish this was the only example

      While at IBM I was drafted to an account in trouble because the client was going to sue and terminate the contract. I found there were no backups available because they had been sent offshore. It was a known issue that had been outstanding for 18 months. After escalation failed and as I was in the process of consciously uncoupling from IBM I threatened to tell the customer if it wasn't fixed.

      IBM seems to think the only time to fix a problem is when shouted at or facing legal action which I saw on several accounts. it all makes for a very tense organisation where people don't even trust each other internally. How can a customer trust them?

      My advice is don't leave more than the FSCS limit (£85000) in Lloyds and keep your own paper records. If you really object tell Lloyds why you are moving your account to a competitor.

  18. Anonymous Coward
    Anonymous Coward

    Those who do not learn from history are doomed to repeat it...


    1. Anonymous Coward
      Anonymous Coward

      This is fantastic, it's the same wording, the same number of staff, "It's not about cost savings" :) I forwarded it to my manager and he genuinely thought it was about yesterday's announcement.

      And that was the most expensive disaster in the history of the company

  19. krivine

    Sympathy to the staff affected

    "As a result, around 500 staff will transfer to IBM on 1 September 2017."

    Poor buggers.

  20. Anonymous Coward
    Anonymous Coward

    Choosing IBM as an outsourcer and IT hosting company...

    You must be out of your fucking minds!

  21. It's Broken Mate

    Welcome aboard

    From all of us happy GTS souls.

  22. Anonymous Coward
    Anonymous Coward

    Apparently Lloyds don't think IT is part of their core business...

    I guess modern banking doesn't rely 100% on the proper operation of their business and so can be outsourced... to the cloud...

  23. PeterM42
    Thumb Down

    Oh dear...

    ......time to sell my Lloyds shares.

    1. Velv

      Re: Oh dear...

      Nah. Staff don't transfer for three months, and it'll take another 12 months to break them.

      This time next year is the time to sell

  24. GingerOne

    Is this a first? 47 comments and not a single downvote. Unsurprisingly, it seems that everyone in IT can see that IBM are doomed and that this is a terrible idea for Lloyds. How long is it going to take for the beancounters to catch on?

  25. Missing Semicolon Silver badge

    "the loss of their final salary pension"

    I thought that's what TUPE was about?

    1. Anonymous Coward
      Anonymous Coward

      Re: "the loss of their final salary pension"

      No. You are offered the current IBM pension scheme. Your Lloyds scheme is frozen. You lose the other benefits your Lloyds pension provides too. It's the most expensive part of this deal for the full time staff.

      Read TUPE rules here.

      Pensions are specifically excluded from TUPE.

  26. Anonymous Coward
    Anonymous Coward

    Chaos monkey

    All the IT staff resign now, it's the best way to stop this nonsense. Lloyds will have to raise your pay rate and pay you a large retention bonus and IBM will have to do the same. Make sure you have a written guarantee that all your Ts and Cs are transferred too. It's the only language IBM understand.

  27. Anonymous Coward
    Anonymous Coward

    I got fired for buying IBM

    I drank the Kool Aid when I was outsourced and bought their assurances.

    Lloyds IT, it's time to play hardball.

  28. Korev Silver badge

    Lotus Notes?

    The poor sods will have to use Lotus Notes...

    1. GruntyMcPugh Silver badge

      Re: Lotus Notes?

      Didn't it get rebranded as 'IBM Notes' and somewhere in between there was the 'Symphony' brand name for all the other terrible apps under one umbrella.

      I just look back on those days and shudder.

  29. moonrakin

    maybe it's OT .... maybe not

    Three Mobile is touted as a UK company - anybody trying to deal with them beyond the retail stores finds out quite quickly that it is essentially an Indian operation these days

    Lloyds had some Indian outsourcing that ended badly some years back... now they seem to have had a bout of corporate amnesia (Alzheimers?)

    1. Anonymous Coward
      Anonymous Coward

      Had outsourcing? Its the growth area in lloyds and increasing all the time :(

  30. Anonymous Coward
    Anonymous Coward

    Right. Sure. Until they outsource the lot to IBM India. Then, the real fun begins. Try to understand their weak English and don't be too cross about their lack of skills, rude demeanor, and inability to get the job done. And don't freak out when the whole lot goes down, due to one of the genius's pulling the power plug, like one of them did at British Airways... >:-)

  31. Rochade

    Morteza Mahjour is you job going to be off-shored to? Are you included in 1500? Watch out, you could be next too!

    1. This post has been deleted by its author

  32. Anonymous Coward
    Anonymous Coward

    cue the printing of more "How to use the toilet" posters...

  33. Anonymous Coward
    Anonymous Coward

    Why so quiet here?

    It seems that Lloyds IT staff don't read El Reg, unless it's blocked by Lloyds.

    1. Anonymous Coward
      Anonymous Coward

      Re: Why so quiet here?

      I can assure you, they do and its not blocked.

  34. Anonymous Coward
    Anonymous Coward

    The register isn't blocked but the forums are blocked .

  35. Teiwaz

    And so the Magic Roundabout music starts again.

    Six to eight years from now move evertything back in-house (or at least into a service offshoot) and find any knowledge transferred has drained away and any documentation has ten years worth of dust on it.

  36. Peter 6

    Karma for staff...their command center staff anyway.

    In my time working for a big payment technology company I've never had the displeasure of meeting a more ruder, more miserable bunch of people than LBG's IT staff. Regardless of whether they were phoning you to inform you of maintenance or if you were phoning them to enquire if there was a problem with their systems or if we had a problem and we were dealing with the response was *always* incredibly surly, sarcastic and depressingly rude.

    So forgive me if I don't shed a tear or two for those whose jobs are about to be off-shored abroad...

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