Fasten Your Seat BeltsThe next ripple of consolidation among local companies in the federal services information technology sector is not far away, thanks to TRW's recent buy of BDM International I

WT Opinion Body - Path to Profits
Hyper Text
Tech Business
State Local

The Staff

Oracle's Network Computer Gamble

Donations have proven a useful tool to new entrants into high-tech marketplaces - something that has not gone unnoticed by officials at Oracle Corp. and its network computer brethren.

Oracle is distributing $100 million in cash and products to U.S. schools in an attempt to gain acceptance of its NC equipment in the marketplace - and senior executives are quietly trying to convince companies such as IBM, Sun Microsystems and others to chip in another $900 million to gain wider recognition for their NC technology.

Officials at these companies and others aligned with the NC family of technology, such as Novell Inc. and Netscape Communications Corp., say they have not yet joined in the promotion program.

But selling the first fax machine, video-cassette player or new operating system can be extremely difficult because of the so-called network effect. Why should anyone buy the new product if it does not work well with any other products out there?


Fasten Your Seat Belts

The next ripple of consolidation among local companies in the federal services information technology sector is not far away, thanks to TRW's recent buy of BDM International Inc. for almost $1 billion.

One industry executive called the deal "a watershed event" likely to trigger more activity. Analysts agree, noting that the prices paid for BDM and Computer Data Systems Inc., Rockville, Md. show that the market is willing to pay a premium for federal IT companies.

The main drivers behind the industry consolidation is simple - cost reduction and value creation.

The wide variety of federal contract vehicles now in place makes larger sales forces a must. Smaller contractors are increasingly losing ground in procurement contests with their bigger counterparts.

Phil Odeen, president and chief executive officer of BDM, summed it up best. The federal government has changed the way it buys information technology services. As a result, Odeen says, the larger organizations will be the successful ones.

What's clear is that senior executives at federal IT service companies dotting the Beltway must move quickly and carefully to position their companies for this next wave of consolidation.

©1997, TechNews. All rights reserved.


Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here


  • POWER TRAINING: How to engage your customers

    Don't miss our Aug. 2 Washington Technology Power Training session on Mastering Stakeholder Engagement, where you'll learned the critical skills you need to more fully connect with your customers and win more business. Read More


    In our latest Project 38 Podcast, editor Nick Wakeman interviews Tom Romeo, the leader of Maximus Federal about how it has zoomed up the 2019 Top 100. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.