A Match Made in Internet Heaven

Systems integrators find a great new market by pairing up with Internet experts

A flurry of marriages of convenience are forming between Internet firms and companies that provide computer networking and infotech consulting.

It makes all the sense in the world: Business customers want not only the flexible technology of the Internet, but the tried-and-true experience of a systems integrator.

So integrators are partnering with and hiring Internet experts, and vice versa.

"Our companies need the ability to leverage the Internet, but still maintain control and safety for their applications and information," said Mike Denny, product marketing vice president for NCR's computer systems group, Dayton, Ohio.

While security software companies can offer one part of the solution and Web developers another, integrators are looking at the big picture of how to make business processes work better.

In return, integrators are expecting to cash in on the lucrative Internet market. According to the Yankee Group in Boston, the business Internet services market totaled $431 million in 1995. By 2000, that market will reach $7.1 billion, Yankee predicts. And while systems integrators weren't even on the map last year, they will represent 7 percent of the total market in 2000, the research firm said.

Internet technology has opened up a whole new world to integrators. "It's a huge marketplace. Everyone is running a hundred miles an hour to deal with the change," said James Mulford, vice president of marketing and service development at SSDS Inc., Englewood, Colo.

Internet technology has completely changed the integration environment, Mulford said. "Systems integrators have to be even more responsive than they have been in the past," he said. Because the technology changes so fast, that responsiveness is tied closely to strategic partnerships, he said, pointing out that more integrators are now allying with the likes of Redmond, Wash.-based Microsoft Corp., Netscape Communications Corp. and Sun Microsystems Inc., both of Mountain View, Calif.

Intranets ? private, in-house networks using Internet technology ? are a predominant result. In fact, many people think of all infrastructure integration that involves Internet technology as intranet-building. "The real focus of an intranet is to let employees become more productive through Web technologies," said Mulford.

Perhaps the most important element of the network ? and one that separates a workable technology from a successful one ? is security.

"As business use of the Internet and the Web increase, users will continue to demand highly secure means to protect their corporate networks from intruders," said Steve Artick, director of strategic relationships at Security Dynamics, which develops Internet products with NeXT Software Inc., Redwood City, Calif.

Computer Associates, Islandia, N.Y., for example, manages Web servers and clients by providing security, event management, customer service and database monitoring. CA's Unicenter/ICE system secures Web servers by blocking TCP/IP ports from would-be hackers; identifying users accessing applications and information over the Internet; and automatically responding to security violations, as well as auditing activity.

The use of Internet technology has helped systems integrators take a different ? and more efficient ? look at how businesses work. "It's understanding what the customer is trying to do in their business," said Joe Quigg, vice president of enterprise management at Computer Associates. "For many years we tried to make the business map to the technology. The new strategy is to map the technology to the business."

Benefits of a well-integrated Internet system range from better customer service so that clients are dealt with more consistently, to the ability to conduct electronic commerce. SSDS, for example, is devising a system for employees to learn about 401(k) plans. "More and more companies are looking at specific business projects that involve the Internet," said Mulford.

Computer Associates, which now works with Microsoft on several projects, will form a major partnership with the software giant later this month, according to Quigg. "It's a far-reaching, deep alliance," he said. The details are scheduled to be unveiled July 24.

While many companies are partnering in the integration and Internet business, one recent alliance shows clearly the strategy behind such a move.

Last month, BBN Corp., Cambridge, Mass., announced a joint venture with Andersen Consulting of Chicago. BBN is known for its Internet work, including development of the ARPAnet, the precursor to the Internet.

The result will be a new, as yet unnamed corporation with offices in Minneapolis and Cambridge. Both companies have an equity stake. Andersen, the majority partner, has an 87.5 percent stake valued at $35 million. BBN has laid out $5 million for its 12.5 percent share.

"We're bringing all the pieces together," said George T. Shaheen, managing partner of Andersen Consulting. "Our customers will come to rely on this ?utility' for Internet-based commerce the same way they rely on traditional utilities for power transmission."

The combination of the two companies, according to executives from both, comes at a time when businesses want to use the Internet, but also need network integration to go along with it. Using the Internet rather than building a large network is a better way to go, they said.

"We are defining a set of business activities that are outside both BBN's and Andersen's current realm," said Michael Grandfield, vice president of strategy and marketing for the new organization. "It would be impossible if one company took responsibility for buildout and maintenance of a private network."

In BBN, Andersen finds experience in the design and economics of networking, Grandfield said. And Andersen offers access to the commercial marketplace that BBN lacks. "We've found a partnership where we complete the strategic aspirations of each other," Grandfield said.

Other companies have chosen to create new divisions to concentrate on Internet technology. Artecon, San Diego, a systems integrator that specializes in UNIX products, formed its TeleCom Division in June. This unit is designed to take a commercial workstation and integrate it with telecom and Internet technology.

"As time to market becomes more critical, outsourcing and strategic partnering play bigger roles in deploying these new products," said Michael Harman, director of business development for the new division.

Another strategy, of course, is for a networking company to launch a product or series of products using Internet technology.

Last week, AT&T WorldNet Service, New York, announced it will create such an offering to integrate software and the Internet. AT&T plans to bundle its Internet access service with offerings from companies such as Grolier Interactive, Danbury, Conn., and Houghton Mifflin Interactive Corp., Somerville, Mass. "Through relationships with innovative software companies, we're giving our customers a means of harnessing the power of the Internet for everyday use," said Tom Evslin, vice president, AT&T WorldNet Service. "Together, they will bring new users to the World Wide Web by integrating the value of the Web with the things people do today and the products they now use."

AT&T has also created a developers alliance program (http://www.worldnetall.com) that offers support for companies thinking of building Internet applications.

NeXT Software Inc. is also taking advantage of the popularity of the Web to introduce WebObjects, software that helps companies develop server-based applications for the Web.

WebObjects can be used either for internal networks or external networks available to the general public. In May, the first month WebObjects was available, sales for the product reached $2.5 million. In addition, 20,000 copies of the free version of WebObjects were downloaded from NeXT's Web site. Some of the customers include MCI Communications Corp., Washington, Motorola Inc., Schaumburg, Ill., and The Sharper Image, San Francisco.

"The momentum behind NeXT in the Web marketplace has been phenomenal," said Mitchell Mandich, vice president of worldwide sales, NeXt software.

Sharper Image, for example, used WebObjects to integrate the company Web site into its existing computing infrastructure. "We wanted the Sharper Image site to provide our customers with a truly interactive experience," said Richard Thalheimer.

That's good news for the company, too. Employees no longer need to update Web pages. Instead, the site is automatically changed when new products are added to a database management system.

Orders are also instantly added to the company's order management system. All of the databases are linked together.

Reebok International is also using WebObjects to create a customized interactive Web site. Users select a fitness goal, type in their fitness level and chart a personalized exercise program. The software then tells the user which Reebok shoes would be best for their activity. Whenever Reebok adds new shoes to its line, they are automatically added to the site.

The government market is also buying integrated Internet solutions. Comnetix, a NeXT developer and systems integrator, has created an ID imaging system for the Boston Police Department. Every year, 65,000 criminals are arrested and released on minor crime offenses because the police can't get their records on time through manual systems, according to Robert Layfield, manager of police systems at Comnetix.

The computerized system, which lets officers identify prisoners while they are still in custody, is certified by the Federal Bureau of Investigation. The Boston Police Department expects to save $1 million a year by using the product.

The whole integration and Internet market is moving extremely quickly. "What we're doing as custom now will be out of the box in six months," said Gary Nelson, executive vice president of SRA International. Nelson, speaking at Washington Technology's Internet Business Summit in June, predicted that SRA's Internet and intranet business will triple over the next year.

Most industry players ? from Internet service providers to computer consultants ? say that the content, rather than actual technologies, should be the focus.

"Your ability to compete in this market depends on your understanding of your customers' content requirements," said Mark Filteau, president of DynCorp's information engineering technology division.

Mark Walsh, vice president of America Online, Vienna, Va., concurred. Walsh, who runs the on-line service's business-to-business division, said commercial and consumer lines are starting to blur. People want the same access at work and at home. For integrators, said Walsh, "The big investment going forward is the back end of the server."

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