Boeing Targets Outsourcing Business

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Boeing Targets Outsourcing Business

By Nick Wakeman

Staff Writer

The Government Services Administration is dangling an enticing multibillion-dollar carrot in front of systems integrators with a project to outsource desktop computing services. It is a meaty morsel that suits the diet of The Boeing Co. as it tries to build its outsourcing business.

The GSA project will cover hardware, software, networking and support and will be open to any government agency. Agencies that use it will turn over the ownership of the hardware and most of the software for their desktop systems to outside contractors.

The project interests Boeing because it fits into the strategy of the company's integration unit in Vienna, Va. That unit, Boeing Information Services, looks for projects where it can supply the networking infrastructure for clients.

Plans call for a draft request for proposals to be issued by July, followed by an RFP by October. A contract award is planned in March 1998.

Bruce Koble, GSA project manager, said the contract will have multiple winners that will compete for task orders. The value of the contract, he said, will rival the GSA data center outsourcing contract, which is potentially worth about $6 billion over 10 years to the three winners. That contract was awarded in February.

Peter Dube, Boeing Vice President fo systems integration, commercial.

"The government is pushing outsourcing in a big way," said Peter Dube, Boeing's vice president of systems integration, commercial.

Dube is in charge of a Boeing service center in Vienna that the Seattle-based company is using as the focal point in its push to attract outsourcing clients. The center has been open about a year, he said.

So far it has one full-service client and several that receive specialized services, Dube said, declining to name the customers. He said he envisions the center having a 50-50 split between government and commercial customers.

Outsourcing opportunities for government and commercial help desk services are expected to grow from $803 million in 1995 to $1.8 billion in 2000, an annual growth rate of 17.4 percent, said Allie Young, an analyst with Dataquest, Westborough, Mass.

There will be plenty of business for Boeing to pursue, Dube said.

Outsourcing projects Boeing is particularly interested in are those where the company can build and service intranets, Internet connections and network computing services for customers, Dube said.

"We want to deliver a utility," he said. Customers are charged by the amount and types of services they use, much like a telephone bill, Dube said.

One factor driving the rise of such utilities is having the technology to service several customers from a shared service center.

"I'm not going to create a dedicated help desk just for one company," he said. "The support service market is moving more and more to a shared service market."

It makes greater economic sense to serve 10 customers from a single center rather than build individual centers for each, Dube said.

While Boeing is not thought of as an outsourcing firm, the company has provided these types of services to companies since at least the early 1980s, he said. Plus the company manages 155,000 desktop units internally and will use this experience to win new customers, he noted.

Though not familiar with Boeing strategy, Dataquest's Young said new entrants to outsourcing often face an uphill battle.

Having a track record and brand-name recognition as an outsourcing provider makes it easier to win business, she said.

But with the growth in the outsourcing market there should be opportunities for new players, she added.


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