EDS Group Targets Internet and New Media Partners

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EDS Group Targets Internet and New Media Partners

By Jim Dukart

Contributing Writer

Plano, Texas - It was created to assist the integrator's internal business units, but six months after Electronic Data Systems Corp. split from its parent, General Motors Corp., the Internet and New Media Group is canvassing the globe for outside partnering opportunities.

A recent example of the group's partnering prowess is the development of PowerAg, a World Wide Web site for a consortium of about 40 agricultural chemical manufacturers. Members of the consortium, including DuPont and Monsanto, face the need to provide information on the potential hazards of the chemicals they sell.

Before setting up PowerAg with EDS, it cost chemical manufacturers an average of about $60 to produce a government-mandated form known as a Material Safety Data Sheet. By pooling their resources and using Internet technologies on PowerAg, production costs have been reduced to approximately 19 cents per form.

Managers of the I&NM unit like to emphasize how the PowerAg project uses Internet technology to merge data from many different systems, building what they call an "extranet" of data from all different companies.

"Extranets tie across a value chain or supply chain to represent a community of interests," said Butch Winters, president of EDS' I&NM, which grew out of several of the integrator's Internet-related projects and today boasts 300 employees.

"In the case of PowerAg, the companies involved saw that they could combine purchasing power and significantly reduce their cost of providing information to customers and government," said Winters, who expects the group could double or triple in size over the next few years.

Cambridge, Mass.-based Forrester Research predicts that the market for Internet help groups will grow from a 1995 level of $611 million to $3.2 billion in 1997 and reach $6.8 billion in 1998.

Forrester describes the Internet help market as a group of companies that provide services including Web page design and creation and intranet construction. The growing opportunities have attracted a varied clan of competitors.

Still, EDS' integration and expanding global capabilities make it an attractive partner. John Hahn, vice president of sales programs for Netscape, said EDS is helping to open doors to large intranet customers.

"What integrators bring to the party is credibility with the customer on both a technical and a business level that is very difficult to get in any other way," said Hahn.

"It helps because it gives a focus point to go to," he said. "In the case of EDS, they're an organization with a tremendous amount of business units that you can focus on a lot of different areas. This gives us a leverage point where we can build a core of expertise."

Waverly Deutsch, director of computing strategy services at Forrester, agrees. "EDS has traditionally been the best player once the technology is provided," she said.

According to Deutsch, one reason EDS established I&NM was to allay concerns that its integration business did not have a creative side.

"If I'm a company looking at any integrator, I need three things: creativity, architectural knowledge and implementation skills. EDS is strongest as an implementor and getting stronger as architects, but this might strengthen the creative. There are big wins to be had in this area."

The I&NM group, then, may be part of EDS' strategy to be seen as a single source for Internet and intranet help. She noted that a recent poll of 50 consumer-oriented Web site managers revealed that 63 percent said they use only one company to work on their Web strategies, another 31 percent said two companies and only 6 percent used more than two companies.

She also said 59 percent of those polled viewed their integrators as a "strategic partner," while only 41 percent viewed integrators as "help for hire."

"So EDS is really trying to become more of a one-stop shop," Deutsch said. "They are moving in the right direction here to horizontally focus on new technology practices relating to the Internet."

Other integrators have done the same. One, IBM Global Services, Somers, N.Y., stresses its network experience to go along with its systems integration work.

"We don't have to integrate and cut a deal with anybody else or have to contract for you with a telco," said Neil Isford, vice president of network computing for IBM Global Services. "All the other integrators do that, and many of them do a very good job. The fact is, from time to market they've got to form that relationship with another company that's got another set of measurements and other priorities."

Isford agrees that the intranet market provides a great area of opportunity for systems integrators.

"Almost all new development in applications for customers is getting focused around the Internet-based technologies," Isford said. "It used to be content hosting, and it was static pages. Now customers come to us and want to move into electronic commerce and intranets. Clearly, it's the future, and our services business is rapidly shifting to that market."


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