23 November 2004 IBM Corp has signed a ten-year contract with US-based technology manufacturer Honeywell International to provide microelectronics expertise for its military projects.

The move represents a direct return to the military defence arena for the world’s largest IT services company, which sold its Federal Systems Division over a decade ago.

Under the agreement, IBM’s Engineering and Technology Services Group will provide Honeywell’s Defence and Space Electronic Systems Group with specialist engineering advice for aircraft, munitions, space and surface vehicles.

IBM engineers will work for Honeywell on the design and production of network-centric battlefield systems.

“IBM’s high-performance information processing and network management tools for use on vehicles will provide our military customers with advanced systems quickly and more cost-effectively,” said Ed Wheeler, vice president and general manager of Honeywell’s Defence and Space Electronic Systems.

The value of the contract was not disclosed, but is likely to be worth tens of millions of dollars to IBM over ten years.

“Teaming with [Honeywell] will allow IBM to expand its services, system and software presence in commercial and military aerospace,” said Pat Toole, general manager at IBM Engineering and Technology Services. IBM sees defence as a major opportunity, with annual expenditure in the US at some $100 billion a year.

The deal also means that IBM will get access to Honeywell’s avionics and vetronics (vehicle electronics) customers.