Across the Digital Nation: Curam, Maximus,Tyler companies to watch in 2004

Rishi Sood

The coming year represents an important transition period for state and local governments. There appears to be a brightening fiscal picture. Midway into their budget year, many public-sector organizations have tightened the budgetary belt, increased fees, and maximized reimbursement practices to help offset the previous shortfalls in revenues.

Consequently, state and local governments are increasingly better positioned to accelerate technology spending to meet enterprise objectives. In 2004, the market will outpace 2003 information technology spending and will likely heighten IT spending during the second half of the year. To that end, there are a number of vendors that are worth watching over the next 12 months as they look to capture market share and assert higher profiles in this marketplace.

Curam Software Inc. of Dublin, Ireland, is one of the most interesting new vendors in the state and local marketplace. The company's focus on bringing an enterprise approach to health, human services and labor programs has created big waves in this often siloed, proprietary-driven marketplace.

Given the flow of federal assistance to support agency modernization, these segments maintain solid funding streams to drive new technology development. Curam's key partnerships with major systems integrators will undoubtedly help capture emerging opportunities in major states. However, as client implementations progress, Curam will need to continue to demonstrate the benefits of its framework in operational -- not just theoretical -- settings.

Maximus Inc., Reston, Va., is another company to watch in 2004. It represents one of the few remaining wholly public-sector oriented firms. Maximus delivers program management and technology services across multiple areas of the state and local market, with specific reference to the justice, human services and health agency segments.

Over the past five years, the company has been able to double overall revenues and move beyond its core client base. Moving forward, however, Maximus will be challenged to match prior growth patterns and will face competitive issues amongst key lines of business.

With respect to the local government marketplace, Tyler Technologies Inc., Dallas, has developed a sizable market footprint over the past three years. The company has used a successful acquisition strategy to gain entry to key agency segments and business processes. As a result, Tyler is a key local government vendor in the tax appraisal, courts, and financial markets.

Tyler has spent the past year wisely focused on bringing an enterprise architecture to its suite of software products. The company's current work with Minnesota state and county courts represents a key springboard for new opportunities in 2004. Despite this contract, however, Tyler will face major competitive challenges in moving upstream in the state marketplace.

The progress of these three vendors will be interesting to watch in 2004. As the economy continues to pick up pace, state and local government decision makers will likely have additional resources and have greater flexibility in assessing 2005 budgets. As all savvy state and local government vendors know, the opportunities awarded in late 2004 and 2005 are won in the pre-sales activity that takes place today.

Therefore, vendors must get back in tune with key decision makers and agency contacts. Vendors that continue to short shrift the state and local government marketplace will be at a significant disadvantage. *

Rishi Sood is a principal analyst with Gartner Inc. in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.

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