Charity Begins at Work for Networking Firms

By Steve LeSueur, Staff WriterThe nation's top networking companies are finding that giving a little assistance to state and local governments pays big dividends down the road, both for the communities they help and often for the companies themselves.Cisco Systems Inc., Lucent Technologies Inc. and 3Com Corp. collectively donate at least $100 million every year to government agencies and schools in equipment, consulting services, scholarships and educational programs. "Being a good corporate citizen pays great dividends," said Jim Massa, director of global government alliances for San Jose, Calif.-based Cisco Systems.Assistance programs, where companies donate equipment and services to governments, create goodwill, establish working partnerships with government officials and help governments get started on ambitious technology and networking projects that can generate huge contracts later.Government and industry officials are careful to point out that when companies donate equipment and services to governments, there is no quid pro quo: that is, no expectation that governments will direct contracts their way. Governments need industry partners, but they also must hold open and fair competitions. So companies view charitable work as investing in long-term relationships and trends rather than as creating immediate business opportunities with specific governments."Sometimes you may create opportunities for your competition," said Massa.Santa Clara, Calif.-based 3Com recently collaborated with the U.S. Conference of Mayors to award $1 million in networking equipment and consulting services to 10 cities in the first phase of the company's Urban Challenge program. Although the $100,000 each city receives appears small, it serves as seed funding that can generate multimillion-dollar technology efforts.David Katz, director of global industry marketing for 3Com, said the mayors tell 3Com officials their goals, such as wiring their schools, and 3Com establishes a plan and brings together the industry and government partners necessary to carry it out. "It's important to have a strong mayor who can serve as a power broker to get this done," said Katz. The 10 cities and their networking initiatives were announced Jan. 28 at the winter meeting of the U.S. Conference of Mayors, a Washington organization representing mayors from more than 1,100 cities. The company intends to award $1 million to 10 additional cities this summer.   Government officials praised Urban Challenge as a strong antidote to a growing digital divide between those who have access to computers and the Internet and those who don't."Urban Challenge is an excellent model to build from as public officials throughout the country work with the private sector to ensure that all Americans have access to the dividends of the digital economy," said Greg Rohde, assistant secretary of the Department of Commerce for the National Telecommunications and Information Administration. The Urban Challenge program is patterned after 3Com's partnership with the Boston public schools, where the company has provided $1 million in goods and services since 1996 for the city's Kids Compute 2001. The goal of the program is to wire the district's 132 schools and provide one computer for every four of the district's 65,000 students by 2001."We needed a partner that could stay with us throughout the project," said Steven Gag, the mayor's technology adviser who oversees the Kid's Compute 2001 program. "David [Katz] really went the extra mile and helped lead us into this."3Com's effort enabled the city to attract industry partners. Intel Corp. of Santa Clara donated $3.5 million in high-end computer chips, while Microsoft Corp., Redmond, Wash., donated $1.5 million in operating software. The total cost of the project will reach $125 million, said Gag. Of that amount, approximately $20 million will come from the private sector, $56 million from E-Rate funding, and the rest from the city. E-Rate, short for education rate, is the common name for the Universal Service Fund established by Congress in 1996 to help equip and wire schools and libraries for the Internet.In this case, 3Com's charitable efforts also provided a monetary payoff for the company. It has won $3 million worth of funding in E-Rate funding contracts as the low-bidder in competitions held by the school district. Boston's students also have benefited. Boston became the first fully networked urban school system in the United States, and the ratio of students-to-computers is now 7-to-1, down from 63-to-1 when the program began four years ago. School officials expect to meet their 4-to-1 goal, said Gag. Lucent Technologies Inc.'s branch offices donate to community organizations on a case-by-case basis, according to JoAnna Schooler, a media relations manager with the Murray Hill, N.J.-based company. Lucent, for example, has provided more than $1 million in switching and cabling equipment and consulting services to Capital Commitment, a Washington organization that trains disadvantaged women and minorities for careers in telecommunications.Cisco, Lucent and 3Com are three of the world's top providers of data networking systems and equipment. Cisco last year had earnings of $2.1 billion on revenue of $12.5 billion. Lucent had earnings of $4.8 billion on revenue of $38.3 billion. 3Com had earnings of $404 million on revenue of $5.8 billion.A large portion of their business goes through resellers and systems integrators, including large companies such as KPMG International, Electronic Data Systems Corp., IBM Corp., Lockheed Martin Corp. and Science Applications International Corp. The state and local government market is 3Com's third largest vertical market behind education and health care, said Katz. XXXSPLITXXX- Networking the libraries of 187 public schools in the city. Developing pilot technology programs in several public schools, with plans to transfer the programs to other schools throughout the city. Building a metropolitan area network for the city that links the public schools to the libraries, city services and Internet. Partnering with 3Com, the commonwealth of Pennsylvania and Widener University to build a multimedia distance learning curriculum to train Chester students for high-skill jobs. Combining voice and video on the citywide metropolitan area network to enable distance learning between students and teachers throughout the city. Installing a metropolitan area network to foster more parental involvement in the schools and help motivate students. Enhancing an existing citywide network to allow more students in the public schools to access educational resources online. Providing a network of computer kiosks to inform young adults about training alternatives and job opportunities. Building a metropolitan area network that integrates voice, video and data services for a world-class information infrastructure for the city's schools and libraries. Networking its remaining two high schools, bringing all the high schools online, and integrating technology in the classroom, including 3Com's NetPrep program.XXXSPLITXXX-By Steve LeSueurAs major networking companies help wire government agencies and schools, they also are offering education programs aimed at training new generations of IT workers. Cisco Systems Inc. expects to spend more than $30 million this year on its Networking Academy Program, said Steve Langdon, a Cisco spokesman. Between 60,000 and 80,000 students in nearly 60 countries participate in the program, he said. Boston public schools use Cisco's academy program, and 3Com Corp.'s NetPrep program to train students and teachers. As a result of these programs, Boston students "are deciding to zero in on technology as a career choice, and a lot of teachers are invigorated by it, too," said Steven Gag, the mayor's technology adviser who oversees the Kid's Compute 2001 program. Cisco has a variety of other assistance programs, such as its Cisco Systems Foundation, which expects to provide $13.7 million to community organizations during this fiscal year, said Langdon. The company also provides free equipment and consulting services to numerous government and education organizations.The Lucent Technologies Foundation also makes cash contributions. This year it will donate $50 million in support of K-12 education and youth development programs around the world.Lucent's Global Science Scholars Program, for example, has committed $20 million over 10 years for scholarships and internships to help students throughout the world pursue careers in communications technology, said JoAnna Schooler, a media relations manager with Lucent."Creating jobs and educating people are two things governments are interested in. We are investing in both," said Cisco's Jim Massa, director of global government alliances.