A New Chapter at EDS

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Northrop Nabs Software Firm

Less than a month after Northrop Grumman Corp. staked out a new acquisition strategy in the wake of its failed merger with Lockheed Martin Corp., the company inked its first deal.

Northrop Grumman of Los Angeles announced Aug. 10 it will buy Inter-National Research Institute Inc., Reston, Va., in a $55 million cash deal subject to regulatory approval. The $60 million-a-year software and application development company specializes in command and control, tracking, data fusion and mapping for the Department of Defense and defense contractors.

Inter-National Research will become part of Northrop Grumman's Logicon division based in Herndon, Va.

Federal Sources For Sale?

Rumors are flying about the possible sale of Federal Sources Inc., a McLean, Va., company that provides information technology consulting and market research.

One source close to the company told Washington Technology that Federal Sources would announce the sale of the company Aug. 14 to Prime Media, a British publishing company. Another source said Gartner Group, a high-profile research and consulting company in Stamford, Conn., was interested in Federal Sources.

Bob Dornan, senior vice president of Federal Sources and a significant investor in the firm, said his company has entertained several offers but no deal is imminent.

Third Deal Looms for GTCR

GTCR Golder Rauner, a Chicago venture capital group with $2 billion under management, will make its third major investment in a Washington-area company in the next several weeks.

Last year, the venture capital firm made its first investment in the Washington region when it plugged several million dollars into Vista Information Technologies of McLean, Va. Late last month, the firm announced its second deal - $100 million for an electronic commerce start-up in Bethesda, Md., called AppNet Systems Inc. (See story, page 44.)

Phil Canfield, a principal with GTCR, said the third deal will involve a roll-up, his firm's forte, but declined to offer any additional information.

Good Samaritan Bill Needs Help

President Clinton's good Samaritan bill, designed to encourage industry sharing of information on fixing the year 2000 computer problem, is at risk of being lost in the congressional shuffle as legislators tackle other concerns.

John Koskinen, chairman of the President's Council on Year 2000, said getting the bill approved before Congress recesses in early October would be "the legislative equivalent of pulling a rabbit out of a hat." The Senate returns from its summer recess Sept. 1 and the House returns Sept. 8.

"We are fighting a limited number of legislative days left this year," Koskinen told a breakfast gathering in McLean, Va., this week. The bill would limit liability for companies exchanging information and solutions for correcting the year 2000 software flaw. The lack of information sharing is impeding remediation efforts, Koskinen said.

USi, PeopleSoft Like 'Em Midsize

USinternetworking Inc., Annapolis, Md., has teamed with PeopleSoft Inc., Pleasanton, Calif., to offer midsize companies access to PeopleSoft's enterprise resource planning software over the Internet.

Through the agreement, USi will store PeopleSoft's ERP applications on its servers, allowing companies access to the software for a monthly fee. ERP products allow companies to automate processes such as inventory management, payroll and finances.

The venture aims to give companies without lots of cash or technical resources access to PeopleSoft products. Typically, only large, deep-pocketed companies can afford to implement ERP products.

A New Chapter at EDS

Chalk up the sudden retirement of Les Alberthal, 54, chairman and chief executive of Electronic Data Systems Corp., to an aggressive streak of some board directors.

Alberthal's retirement shows that independent members of the company's board of directors are getting more aggressive, said William Loomis, an analyst with Legg Mason Inc. of Baltimore.

The search for a successor is focusing on an outsider. Alberthal, who will stay in the post until a successor is found, is the second chairman and CEO behind founder Ross Perot.

Although Alberthal said he was retiring voluntarily, analysts noted that EDS' revenue has been dragged down by poor performance by General Motors, which accounted for 25 percent of the Plano, Texas, systems integrator's overall revenue in 1997. Revenue from GM, its former parent, fell by 9 percent in the last quarter, while revenue from all other sources rose by 25 percent, Loomis said.


The Next 20 Years

With Hollywood as the backdrop, three IT savants boldly offered predictions last week of what the next 20 years hold for the computer industry.

Among the more intriguing observations, Paul Saffo, director of the Institute for the Future, Menlo Park, Calif., said the next decade would be dominated by cheap sensors.

"Cheap sensors will enhance our eyes, ears and sensory organs. They will follow Moore's Law, doubling in performance and halving in price every 18 months," he said.

Look for throwaway video cameras, to be used once and trashed. Also, the decade will mark "the advent of 'smartifacts' - intelligent artifacts - and the end of inert matter," Saffo said.

His remarks were made to 535 attendees at the Directors Guild of America Theatre and others watching remotely, part of a seven-city series titled "The Next 20 Years," hosted by publisher Ziff-Davis and sponsored by Arthur Andersen's Knowledge Enterprises.

According to Saffo, the computer revolution has yet to begin. "In the next 20 years, you will see the evolution of the analog electronics industry, one based not on electrons but on ions or photons; in essence, molecular-level computing," he said.

Common themes at the session were the likely reduction of the barriers between user and hardware, and the seamless interaction and integration of computing devices into everyday life.

S. Joy Mountford of Interval Research Corp., Palo Alto, Calif., focused her projections on changes consumers are most likely to accept. She highlighted several areas, including the increased personalization of the personal computer.

"Just compare the PC to the bathrooms in airports. Most of them know when you have finished your business or are ready to wash your hands," she said. "On the PC side, we need more customization and filtering of information. We need to move from windows to mirrors, from just transacting with or through PCs to making them reflect our schedules and demands."

Next on her list was improvement in personal devices. For example: earrings that will whisper the name of the person approaching you at a corporate gathering; a sensor in a coffee cup that maintains the drink's temperature; and the computer as a Post-It Note.

"We need to change the design and form factors of computers from rectilinear boxes to make them more attractive, softer, rounder. We will likely see the attractiveness factor starting to play a part in the consumers' purchase decisions," she said.

Finally, she stressed the need to free people from carrying heavy displays and suggested the introduction of something akin to an ID card that would hook into a service account and activate a computer in hotels.

Panelist Ramana Rao, chief technology officer and director of engineering for Inxight, a so-called Xerox New Enterprise Company at the Palo Alto Research Center, said no technology in the next 20 years would be as significant as the Internet.

"The next 20 years will be about integrating the network of networks into our culture, about the massive investment of societal attention, of interacting with computers in more natural ways, such as spatial-visual computing," said Rao.

- John Makulowich




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