TOP 100: Inside DXC's government market re-entry

EDITOR'S NOTE: Shortly after DXC Technology launched in April and brought together Computer Sciences Corp. and HPE Enterprise Services, Marilyn Crouther, the leader of their federal business talked with Washington Technology about the firm's federal presence and vision for making her business a key component of the company's success. DXC is ranked No. 10 on the 2017 Washington Technology Top 100 with $3.2 billion in prime contracts.

With much fanfare and anticipation, DXC Technology made its public launch April 3 into the IT services market through the merger between the now-former Computer Sciences Corp. and the enterprise services business of Hewlett-Packard Enterprise.

Inside the new $24 billion-revenue giant DXC is an estimated $2.9 billion U.S. public sector business that offers technology services to at least 300 customers at the federal, state and local levels. That business operates in market areas that include cybersecurity, cloud computing, data and applications.

Many of those areas were the same ones CSC competed in prior to its November 2015 exit from U.S. government business. CSC spun out that $4 billion business in November 2015 and it subsequently merged with SRA International to form the nearly $5 billion CSRA that operates in those market segments.

Day one for DXC also represented its re-entry into a U.S. government market against a backdrop of analyst speculation over a potential sale or spin of that business.

Washington Technology spoke last week with Marilyn Crouther, senior vice president and general manager of DXC’s U.S. public sector business, who reiterated an improved forecast for both that business and federal budget environment DXC CEO Mike Lawrie gave investors in a March 29 presentation.

“I see us as a key component with an opportunity for growth ahead and think we’ll be one of the key players within the company. In all of Mike’s conversations he’s expecting single-digit growth from us and is excited about the future,” Crouther said.

Crouther identified the Defense, Homeland Security and Veterans Affairs departments as potential growth areas for DXC. President Donald Trump’s fiscal year 2018 budget proposal seeks higher funding amounts for those three Cabinet departments.

“Even in areas where there are budget reductions, that also represents an opportunity for us as agencies will need to modernize their infrastructure and how to produce savings for new technologies,” Crouther said.

DXC’s public sector work also includes $2.6 billion in sales to international customers in many of the same service areas as Crouther’s organization. Overseas government business is distributed among DXC’s six other major regional business lines: Americas outside the United States; United Kingdom and Ireland; Central and Northern Europe; Southern Europe; Africa, the Middle East and Asia; and Australia and New Zealand.

DXC views itself as a driver of a new model of IT through what Lawrie described to investors as an “outside-in” model versus a traditional setup. That evolution includes in the U.S. public sector with many agencies on digital transformation journeys, according to Crouther.

Key to making that journey go smoothly for agencies is working “real closely with stakeholder and end users,” she said.

“An outside view without detailed knowledge of the mission and vision and specific end user needs would not be successful. It will be an ‘outside in’ but also be a strong partnership and be a journey as opposed to an event,” Crouther said.

A second aspect of DXC’s partnerships involves those with technology vendors to help customers transition to digital IT environments. DXC’s partner base includes at least 250 IT product and service providers with many of the same identities CSRA works with in the U.S. government market.

DXC inherited many of its vendor collaborations with HPE Enterprise and the new company views them as having similar goals in both commercial and public sector, Crouther said.

In both markets, clients are on digital transformation journeys that require DXC and other companies like it to help guide them and reallocate IT resources for that shift, according to Crouther..

DXC’s size and scale as one of the world’s largest pure-play IT service companies will be a main selling point for the company.

“Being able to bring that home is sharing with our customers how we can help them accelerate change and take advantage of the technology we deliver for them,” Crouther said.

“What we’re able to do as a combined company from a scale perspective and leveraging both commercial and public sector instances will be critical to our success going forward.”