E-Voting Market Spurs New Alliances

A growing number of high-tech companies are forming alliances and creating new business lines aimed at tapping into the potentially lucrative electronic voting marketplace. Most recently, Dell Computer Corp. formed its second e-voting alliance, this time as the leader of a partnership with Hart InterCivic Inc. As part of the agreement, announced June 4, Hart InterCivic has given Dell exclusive rights to sell its flagship product, an electronic voting machine known as eSlate. Dell also is part of an alliance formed in January with Unisys Corp. and Microsoft Corp. to provide a comprehensive voting solution. The new alliance gives Hart InterCivic of Austin, Texas, a national presence, while Dell gets entry into a market where it had little experience or background, said Jeremy Sharrard of Forrester Research Inc. of Cambridge, Mass."We felt we couldn't scale up for the national market without some help," said Bill Stotesbery, Hart InterCivic's vice president of marketing. Dell of Round Rock, Texas, will help his company with manufacturing, logistics and supply chain management, systems engineering and deployment and support, he said.The Dell-Hart InterCivic team this month won a $25 million contract with Harris County, Texas, the companies said. As the new team prepares to bid on more projects, it could find itself competing against other prominent government information technology companies also eyeing the election market, including Accenture Ltd., Compaq Computer Corp., Electronic Data Systems Corp., Microsoft and Unisys. Some of these companies, such as Dell and Hart InterCivic, have formed alliances focusing on equipment, while others are focusing on the voting process, said analysts and industry officials. "There has been a lot of activity and some consolidation [in the market]," said Meg McLaughlin, a partner with Accenture's e-Democracy Group.Much of this activity has been spurred by the expectation that state and local governments will move to modernize voting equipment and election processes in the wake of the Florida election fiasco. The voting systems and solutions market is typically about $100 million to $200 million per year, but is rapidly changing "to a billion or more per year market," said Barry Lurie, managing principal for Unisys North America Public Administration Practice. Lurie's estimate corresponds with the projections of research firm Gartner Dataquest of Stamford, Conn., which puts the market for voting equipment alone at $1.5 billion to $3 billion from 2001 to 2006.The fate of the market is tied in large part to whether Congress this year establishes a federal matching grant program providing much-needed assistance to state and local governments to modernize systems and overhaul flawed registration processes.The Federal Election Modernization Act, sponsored by Sen. Charles Schumer, D-N.Y., calls for $250 million in matching grants. Another bill, the Election Reform Act of 2001, sponsored by Sen. Mitch McConnell, R-Ky., would provide $400 million in matching grants. Both bills have been referred to the Senate Committee on Rules and Administration for possible hearings. Some would like to see even more money spent for this purpose. In a policy brief published June 1, Thomas Mann, the W. Averell Harriman Senior Fellow at the Washington-based Brookings Institution, said the federal government should allocate $500 million per year for states to develop statewide electronic voter registration databases and for localities to upgrade antiquated voting equipment.Ironically, the anticipation of federal funds has served to slow, rather than stimulate, action by many state and local governments, which are waiting to see what Congress does, Lurie said.Despite the uncertainty, industry officials remain confident Congress will approve some level of funding for grants programs.XXXSPLITXXX-Most of the business revenue associated with elections will come from upgrading machinery, voter education and recruiting and training poll workers, said Jennie Drage, an election analyst with the National Association of State Legislators in Denver. "Those are the three biggest costs associated with elections that are not funded at the state level in many states," she said. Although states are willing to help localities with these expenses, they may not allocate funds until they know whether the federal government will provide money, Drage said. State officials also will want to analyze the available election technologies and find out whether they have to comply with disability laws before committing funds. "States don't want to spend money on systems, and then find out they have to replace them," she said in regard to disability requirements.Some state and local governments, however, have already begun to move forward. Florida Gov. Jeb Bush signed a bill in May that would provide Florida counties with $24 million over two years to modernize voting equipment, $6 million for voter education and $2 million for a centralized voter registration database. Georgia Gov. Roy Barnes signed an election reform law in April that funds a $200,000 pilot program to test various electronic voting systems in 13 cities throughout the state. The cost of buying electronic voting machines for use in all 159 Georgia counties ranges from $4 million to $100 million, said Cara Hodgson, a spokeswoman for Georgia Secretary of State Cathy Cox. Meanwhile, Danaher Controls Inc. of Gurnee, Ill., captured a large award in April when it won a $19.3 million contract to provide Philadelphia with 3,500 electronic voting machines, said Louis Applebaum, commissioner, procurement department, for Philadelphia.XXXSPLITXXX-There's more to elections than just election day, said Christopher Baum, vice president and research area director for electronic government at Gartner Dataquest. Baum likens elections to a wedding. "After you survive all the planning and logistics, the actual day is almost a non-event," he said, adding, "the real opportunity for integrators is helping with the election process." Sharrard said integrators and high-tech companies pursuing election-related business originally saw the access issue ? providing machines that could be used by blind and disabled persons ? as their best entry into the market. But after Florida's problems in last year's presidential election, companies also saw a market for helping localities "get timely results that are accurate," he said. High-tech companies also are watching for opportunities related to ballot design, language translation, poll site Internet voting and Americans with Disabilities Act requirements for federal elections, according to analysts. Accenture's McLaughlin believes voter registration is the single biggest opportunity. Accenture and its partner, election.com inc. of Garden City, N.Y., are looking at several possibilities in this area and expect to win contracts by year's end. Colorado, Connecticut, Florida and Pennsylvania have indicated they want to establish statewide voter registration databases, she said.Election administrators are just as concerned about strengthening the voter registration process as they are upgrading systems, she said."The election officials understand that a voter registration database is the hub of the system," McLaughlin said. "If this isn't accurate and up to date, then there will be problems like there were in Florida."