Agencies Sent to Year 2000 Doghouse

Presslink photo

Steve Case


Still trying to buck that reputation of "the proprietary network," America Online, Dulles, Va., last week launched AOL NetMail, which lets AOL users access their e-mail directly from the World Wide Web.

In an effort dubbed "AOL Anywhere" the company is also beefing up content on its site, which is available to all Internet users.

But AOL is still plagued by customer service complaints. Although it has 10 million customers, it's not clear how many are regular users as opposed to people who sign on for free trial subscriptions. In an interview last week, CEO Steve Case said the company no longer reveals its churn, or turnover rate.

Case defended the relentless sending of free AOL software. "Maybe we're stupid, but it does make sense," he claimed.

By this week, Case said, AOL will have 1 million customers outside the United States. It's been difficult, he said, promoting a company with the name "America" in the title internationally. So the brand name of the company is simply "AOL" in marketing materials outside the United States. "We realized the name ... wouldn't sell that well in France," Case said.

In the Washington region, Case said AOL has become known as the "fun" company to work for and that it doesn't have the same recruiting problems of other companies.


The Mid-Atlantic Venture Association of America, the group that brought its annual venture capital fair to the Washington area for the first time last month, will set up shop in Vienna, Va., next year.

Officials at the Fairfax County Economic Development Authority say that they have formed a partnership with MAVA that will not only allow the Timonium, Md.-based association to have a stronger Northern Virginia presence, but also will create a Fairfax County Venture Fair to be held annually, starting next fall.

Until this year, the MAVA venture fair was rotated between Philadelphia and Baltimore each year - more traditional financial hubs than Washington. But, because Fairfax County has seen such a drastic increase in technology businesses that draw attention of venture capitalists, the Washington suburb needed an outlet to attract regular attention from the national financiers, said Patricia Woolsey, chairman of the county's Economic Development Authority.


WinStar Communications Inc., a competitive local exchange carrier in New York, has agreed to buy GoodNet, a Phoenix-based Internet backbone provider, for $22.5 million. The Internet company will enable WinStar to sell online services to its wireless telecom customers, and will be part of a new division called WinStar Broadband Services.

GoodNet, founded in 1994 and owned by Telesoft Corp. in Phoenix, has points of presence in 27 cities and a national asynchronous transfer mode network. By the end of the first quarter of 1998, GoodNet will have points of presence in each of the 21 cities where WinStar is planning to sell telecommunications services. WinStar expects GoodNet to contribute $10 million to the company in 1999.

The deal calls for WinStar to pay $3.5 million in cash and the remainder in common stock.

Separately, CLEC American Communications Services Inc., Annapolis Junction, Md., on Dec. 16 opened a 108-mile fiber optic network in the Washington-Baltimore region.

ACSI, which sells local, long distance and data communication services to business customers, also signed a deal to wire 52 commercial properties in the Washington area, creating what the company calls "intelligent office buildings."


Gartner Group, one of the country's largest independent market research and consulting firms, is coming to Washington with a government consulting team.

The Stamford, Conn.-based firm, which already has a sales team in the Washington market, began staffing a consulting practice in Falls Church in October. Scott Lewis, who heads the local office, said that he expects to have 25 consultants in place over the next several years.

"We have done a fair amount of business with the federal government in the past and have staffed those projects remotely," Lewis said. "It seemed logical that, between the government, the information technology vendors and the communications companies, we have a customer base here."

Gartner, a $511 million company, goes head to head with the Big Six (or four) accounting firms and consultancies ranging from McKinsey & Co. on an international level to Federal Sources Inc. of McLean, Va., on a local IT level.


Procurement officials worried about year 2000 problems hidden in vendors' products can now turn to a Web site for bare-bone analysis and comment - The Web site was developed by a subcommittee of the multi-agency Chief Information Officer Council, and displays year 2000 statements by the product's vendors, as well as the results of testing by agencies.


The selection of Paul Brands as chairman of American Management Systems Inc. means AMS is unlikely to join the merger-and-acquisition fray, analysts say.

If an outsider had been appointed, it probably would have been a sign that the company was looking for a buyer, said Tom Meagher, an analyst with Ferris, Baker Watts, Baltimore.

Brands, who replaces Charles Rossotti, now commissioner of the Internal Revenue Service, tells Washington Technology AMS is doing just fine as an independent company. Brands, who has been chief executive of AMS since 1993, was named chairman and CEO by the board of directors earlier this month.

"The past couple of years, Charles and I worked hard to put a foundation in place," said Brands, who has overseen efforts to manage AMS' annual growth rate. That rate hit the 30-plus range but Brands says that rate stretched resources.

"Twenty percent per year is very doable for us. You have to balance opportunities for growth vs. the risk," he said in a recent interview.

Analysts approve. "This has been a tough year for AMS and Paul has done as good a job as anyone could in keeping the company focused on growth and keeping morale high," said William Loomis, an analyst with Legg Mason Wood Walker, Baltimore.


The Advanced Technology Program has been reorganized by the Commerce Department's National Institute of Standards and Technology to promote high-tech research. The new rules are also intended to ease participation by medium-sized companies and ensure that large companies pay their expected chunk of each project's costs.

The rules, published in the Federal Register, sprang from a survey of companies and researchers begun last March, which showed the need for improvements. For example, the new rules offer a better definition for "large company," and detail how participating companies should estimate the value of in-kind contributions, such as proprietary software.

Agencies Sent to Year 2000 Doghouse

The White House's Office of Management and Budget has sent the departments of Energy, Health and Human Services and the Office of Personnel Management to the year 2000 doghouse. They join these agencies: Agriculture, Education, Transportation and international-aid agencies, whose modernization plans are being slowed to fund year 2000 fixes.

The Dec. 16 announcement came five days after the House subcommittee on government technology predicted that half of the major agencies will fail to meet the December 1999 deadline for repairing the costly year 2000 fault in their software.

The OMB report sought to prod further progress from the agencies by naming the worst-performing agencies and by accelerating federal repair schedules by four to five months. OMB also directed agencies to prepare plans for independent testing of software fixes and to draw up contingency plans for programs


Number of Percent Number
Critical Compliant Being
Computers With Year 2000 Repaired
Department of Energy 468 29 161
Health & Human Services 487 33 194
Office of Personnel Management 124 14 94
Department of Agriculture 1341 16 947
Department of Education 19 37 5
Department of Transportation 516 7 149
Agency for International Development 65 11 31
that won't be fixed in time. The federal repair cost has risen by $100 million since August to a total of $3.9 billion, not counting already-planned system upgrades or state repair costs, says the OMB.

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