Unisys Online Shopping Forum 'Breaks the Mold'

Deliveries are to be made within 48 hours thanks to an agreement with Federal Express.

For the first time, end users of information technology in the government will have a central clearinghouse where they can comparison shop and get quick delivery - just like in the commercial world, James McGuirk, president of Unisys Federal, said in an interview.

"The government doesn't have this now," McGuirk said. "We are trying to break the mold."

"We will have the best prices, the fastest delivery and the largest selection," he said.

Unisys' approach to the open market is unique if not ground-breaking, analysts said.

"I'm not aware of anyone who offers such a comprehensive program, said Norm Berthaut, vice president of Input, a Vienna, Va.-based market research firm.

"This is going to be one of those things that if it is successful, everyone will claim to be the father," "But if it fails you won't be able to find a parent," McGuirk said.

Distributors for the system are Ingram Micro Inc., Santa Ana, Calif.; Merisel Inc., El Segundo, Calif.; Tech Data Inc., Clearwater, Fla.; Insight Inc., Tempe, Ariz.; MicroAge Inc., Tempe, Ariz.; and Intelligent Electronics Inc., Exton, Pa. They bring about $3 billion in inventory and more than 35,000 products to the system, McGuirk said.

The goal for the first year is sales of $10 million to $20 million, McGuirk said. While Select IT should have a variety of users, it is primarily targeted at holders of the federal government's
IMPAC credit card, he said.

The credit card generally has a limit of $2,500 per purchase, although some holders can have higher limits.

Use of that credit card is on the rise, said Payton Smith, an analyst in the Falls Church, Va.-based government division of the research firm International Data Corp. While credit card sales do not make up all of the government's open-market buying, credit card usage is the best barometer of that market, he said.

In 1995, IT purchases with the credit card totaled about $194 million. In the first three quarters of 1996 - the latest data Smith had available - purchases were $162 million.

Total 1996 credit card sales will probably reach about $250 million, he said. About 220,000 IMPAC credit cards have been issued by GSA.

Unisys Federal shifted about 10 employees, who will market the service, to Select IT, McGuirk said.

Processing orders, which can be given through the World Wide Web, by fax or telephone, will be Unisys' partner in the venture, Direct Alliance Corp., Tempe, Ariz., a part of Insight. Direct Alliance has run a similar system for commercial buyers for several years.

"In theory, it sounds great, but it has to be proved," said Mathew Mahoney, program director for IDC-Government.

Unisys will have to keep the fee it charges for using Select IT low enough so that its prices remain competitive with the GSA schedule, Mahoney said.

McGuirk would not comment on what fee it would charge for the use of Select IT but vowed prices will be competitive. "If we can't match or beat [GSA prices] we shouldn't be doing this," he said.

Mahoney also said he isn't sure if there is a big enough market of government users who will pay extra just to get equipment more quickly than from the GSA schedule, he said. Deliveries from GSA can take several weeks.

Robert Dornan, an analyst with Federal Sources Inc., McLean, Va., said he would feel more confident in Select IT's success if Unisys put the offering on the GSA schedule. The schedule is a safe vehicle for government buyers to use.

"The availability of a safe vehicle is as important as price, service and product availability," he said.

The success of Select IT will depend on how much like commercial consumers the holders of the IMPAC credit cards are willing to become, McGuirk said.

"We are on the edge," he said. "We will see if we are prophets or clowns."