Xerox, the company known for its printers and document management systems, has been contracted by the state of Texas to consolidate its data centers from 28 to two.

In 2010 Texas announced it would rethink who would undertake its consolidation project following a failed seven-year contract with IBM.

The contract at that time was worth US$863m.

The project, commissioned by the Texas Department of Information Resources, is now worth US$848m.

It is designed to allow the state to provide cloud-based services for citizens, according to Department of Information Resources executive director Karen Robinson.

“This project is about making the best use of taxpayer dollars,” Robinson said.

“The new data center services project will stabilize services for our state agency customers, improve responses to state agency needs and allow visibility into system costs so that agencies can manage their use of services for increased efficiency.”

Under the original contract the project was to be completed in 2009 but work had halted due to allegations of contract violations that led to months of discussions between the two parties.

IBM had accused the Texas State of being unwilling to “cede control” so that that the data center project could move forward.

Xerox already has a contract with the state valued at US$53m for printing and mailing services supporting a number of its agencies.

Xerox, however, also offers IT services as part of its portfolio as well as business process outsourcing.

It already offers enterprise-class cloud-based services through its own data centers to large organizations along with virtualization expertise under its Xerox Cloud.

The Texas state contract will also cover disaster recovery and security for the state.

For the project, it said it will work with a number of technology market leaders as well as companies listed under Texas’ Historically Underutilized Businesses category/