President Clinton's Fireside Chat

President Clinton's Fireside Chat

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You Scratch My Back ...

UUcom Inc., a small Internet engineering operation in Alexandria, Va., has come to the rescue of online money firm, CyberCash Inc. But Reston, Va.-based CyberCash is coming to UUcom's aid as well.

UUcom, known for its highly sensitive international government work, will expand and upgrade CyberCash's Internet architecture and operational facilities. In return, CyberCash announced July 6 it will make an undisclosed equity investment in privately held UUcom.

CyberCash wants to use UUcom's connections with Internet service providers to speed up its slow sales.

PSINet Gobbles Internet Firms

PSINet Inc., one of the largest independent Internet service providers in the United States, bought four more companies July 7, bringing the company's acquisitions to eight since January.

The latest purchases, which cost PSINet $46 million in cash, include LinkAge of Hong Kong, INX of Germany, SCII-
CalvaPro of France and ioNET of Oklahoma.

Edward Postal, chief financial officer of Herndon, Va.-based PSINet, said the company wants to double last year's revenue of $122 million. The eight purchases so far this year should provide $50 million in sales toward that goal.

IRS Moves on CIO Front

Paul Cosgrave is the apparent front-runner to become chief information officer for the Internal Revenue Service. He would replace Arthur Gross, who left the job April 1.

Cosgrave, who was hired July 7 as a consultant to the IRS on technology modernization, likely will become CIO after President Clinton signs the IRS modernization bill sometime this week, sources said.

Cosgrave most recently was the president and chief executive of Claremont Technology Group, a provider of information technology services in Beaverton, Ore.

Pulsar Is Daring You

Feeling quite proud of its new product, Pulsar Data Systems Inc. of Lanham, Md., issued a challenge to computer hackers everywhere: Break into its new computer security product, and Pulsar will give you a computer. No word yet from the company on how many takers they have had or if any of them have been successful.

EMC Puts DoD in Its Sights

EMC Corp., Hopkinton, Mass., is mounting an offensive to increase federal sales by targeting opportunities at the Department of Defense.The company, which makes storage equipment for computer systems, does 70 percent of its government business with civilian agencies and 30 percent with the Defense Department. Company officials want to see the mix closer to 50-50 and have promoted Carolyn Hyde, formerly in charge of EMC's civilian business, to the top position at EMC federal to oversee the sales initiative. EMC's federal unit has 54 employees.

EMC, which won't disclose federal revenues, reported sales of $2.9 billion in 1997 and expects 30 percent growth this year.

Encryption Plan Well-Received

The "private doorbell" proposal unveiled last week by a coalition of high-tech companies led by Cisco Systems Inc. was greeted by White House officials as a possible break in the debate over encryption.

A white paper released this week by the coalition, which includes Network Associates, Sun Microsystems, Hewlett-Packard, Intel and Microsoft, specifies only encryption technology that follows the "operator action model" should be exported.

The coalition hopes this model will appease law enforcement officials concerned about criminal activities being masked by encryption technology. The IT industry and law enforcement officials have been at loggerheads over the issue for several years.

Consolidation Cools

Consolidation in the defense industry has slowed, with most of the major mergers and acquisitions having already taken place. Ferris, Baker Watts recently evaluated the acquisition potential for several third-tier information technology contractors. Most were deemed to have low takeover potential during the next two years.

Company Acquisition Potential
Advanced Communication Systems Low
Analysis & Technology Medium to high
BTG Inc. Low
CACI International Low
Comptek Research Low to medium
DRS Technologies Low
Dunn/IDP Computer Corp. Low to medium
Dynamics Research Medium
Government Technology Services Inc. Medium to high
GRC International Low
Nichols Research Low
Titan Corp. Very low
President Clinton's comments this week on the headline-grabbing year 2000 issue signified an end to the administration's "period of denial," said Rep. Steven Horn, R-Calif.

"It was a good fireside chat," said Horn, one of the most vocal members of Congress on the issue and co-chairman of the House Task Force on Year 2000. "Now maybe when he's in other parts of the country, he can mention it and keep the pace up. It's not just a federal problem."

Clinton's July 14 address at the National Academy of Sciences marked his first major speech focused on the computer code glitch that many federal agencies are far behind in repairing. Vice President Gore also addressed the academy. Both officials have been under fire from government and industry officials during the past two years to focus attention on the potentially devastating problem that could wreak havoc on computers across the nation.

Horn said he will push federal agencies to submit weekly year 2000 progress reports to the administration. Currently, such reports must be submitted quarterly.

In addition to stressing the need for bipartisan cooperation, Clinton said the government must get its own house in order.

"We have made progress," he said. "But not every agency is as far along as it should be. I have made it clear to every member of my cabinet that the American people have a right to uninterrupted service, and I expect them to deliver."

Clinton announced several new initiatives, including legislation aimed at limiting liability for companies, associations and others that share year 2000 information.

Sen. Robert Bennett, R-Utah, chairman of the Senate Special Committee on the Year 2000 Technical Problem, said he supports the initiative because it's tough getting good information.

"The most frustrating thing to me is I can't get a handle on what the dimensions of the problem really are because I can't get people to tell me the truth," he said.

Following England's lead, Clinton announced the United States will contribute $12 million to the World Bank to increase awareness of the problem in developing countries. The president also said the Labor Department has set up a year 2000 Web site and job bank to bring programmers and employers together. Finally, the Council on Year 2000 Conversion, headed by former Office of Management and Budget official John Koskinen, will kick off a national campaign later this month to raise awareness of the year 2000 issue.

- Richard McCaffery




Copyright 1998 Post-Newsweek Business Information, Inc. All rights reserved
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