'Vendorgrators' Sell Total Solutions

'Vendorgrators' Sell Total Solutions<@VM>'Vendorgrators' Sell Total Solutions

Payton Smith

By Mike Wiebner, Contributing Writer

As federal agencies purchase more workstations off the General Services Administration schedule and less off open-ended contract vehicles, vendors must differentiate themselves by the integration and post-sales support they deliver, industry officials said.

"The No. 1 complaint we hear from people is, 'I bought this stuff off the GSA schedule, and it sat around. We didn't have anyone to integrate it or didn't realize how much work it was to get networked,' " said Tom Baybrook, vice president of Intergraph Federal Systems.

"We're 'vendorgrators.' We provide the solution, the hardware, the software ? either our engineering software or applications from other vendors ? and the implementation services to put it all together," said Baybrook, whose company supplies workstations and other products for interactive computer graphics systems. "It's truly one-stop shopping."

The demand for "vendorgrators" has been bolstered by the growing trend among agencies toward hybrid systems, where both Unix and Windows NT workstations are used. This trend will provide vendors and value-added resellers with systems integration skills an opportunity to up their margins as they add more value, industry officials said.

The Unix platform, long the dominant workstation, has faced increasing sales challenges from Windows NT advocates. Which workstation platform wins on a particular sales call is usually determined by an agency's existing technology infrastructure, history, performance and scalability needs, existing expertise and budget.

Unix proponents argue that their installed base, customer loyalty, high-end performance and scalability will secure Unix a place in the market. NT supporters, however, point to their growing market share, processing power and improving performance on high-end applications as a sign of things to come.

The competition has had obvious benefits for government purchasers, driving prices down and performance up.

"With the advent of NT workstations, the market has seen growth in units, but the pricing has decreased," said Peter Ffoulkes, a principal analyst with market research firm Dataquest of San Jose, Calif. In 1995, 804,000 workstation units were sold for $12.77 billion; in 1997, 1.02 million units were sold for $12.6 billion, according to Dataquest.

Input, a research firm in Vienna, Va., predicts sales of workstations to the federal government will increase from $590 million in 1998 to $760 million in 2002.

While Windows NT has witnessed fast growth in the federal government, particularly at the work group level, Unix still maintains solid growth, said Payton Smith, an analyst at Federal Sources Inc., McLean, Va.

"Larger, enterprise-level users are sticking with Unix, which is still growing," Smith said. "It is not necessarily a losing battle for either one. Unix is perhaps more scalable and adapts to enterprisewide architectures better."

John Leahy, group manager of government affairs and public relations for Sun Microsystems Federal, said the NT hoopla is often more hype than reality. Sun is the No. 1 supplier of Unix workstations, with 41 percent of that market segment, according to Dataquest.

"The perception is that the NT workstation is slowly chewing away at Sun or Unix vendors' products," Leahy said. "Microsoft has a great marketing machine. They would have you believe they're taking over the [workstation] world.

"In fact, Sun introduced two low-end systems earlier this year that compete exceptionally well with any NT workstation both in performance and in price," he said.

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Tom Baybrook

The federal workstation business is still contract-based to a much greater extent than PCs are, Smith said.

"With PCs, you have more people buying through the [General Services Administration] schedule than any other vehicles," he said. "Workstations are largely sold through [indefinite-delivery, indefinite-quantity] contracts. That helps create a steady stream of demand."

Although government customers still typically buy workstations off contracts, buying off the GSA schedule has become more attractive than ever, industry officials said.

Sun Microsystems Inc. of Mountain View, Calif., continues to lead the overall workstation marketplace, according to Dataquest. The No. 2 supplier is Compaq Computer Corp. of Houston, which acquired Digital Equipment Corp. in June.

Rounding out the top five workstation manufacturers are Hewlett-Packard Co. of Palo Alto, Calif., IBM Corp. of Armonk, N.Y., and Intergraph Corp. of Huntsville, Ala.

Many customers are still deploying Unix systems, despite NT's momentum, said Brad Westpfahl, manager of personal computer marketing for IBM Global Government Industry. Factors that would speed NT's adoption include greater reliability, scalability and the ability to run very large images on a single server, he said.

"Once an application is available on NT, users and the financial people start looking at price and performance issues," said David Kerr, advisory sales specialist for IBM. "If it runs on NT and the performance is comparable, [users] get the advantage of putting everything on one desktop."

Unix workstation vendors now probably are more interested in raising the performance bar against NT than in bringing costs down, Smith said.

"Their strategy is [to keep] the processing power advantage they've had for so long and to try to keep improving their product," he said.

When customers move to an NT system, they want to know the applications they used on Unix are tested and certified on the NT platform, said Mark Linesch, director of strategic marketing for Compaq's workstation division. "They want to understand the performance of the solution on that platform."

Performance isn't the only criteria that concern workstation buyers, he said.

"What's more important is the cost of the systems over the life of the workstation and their manageability. If I'm a scientist working on one of these workstations for a national lab, I also need to write reports and use spreadsheets to crunch numbers," said Linesch. "NT is a very familiar interface with lots of application support. It's something most people in business today will have experience with, in the home or office."

The Federal Aviation Administration has considered the cost and performance issues when buying workstations for its Micro-EARTS project, an automated en route radar tracking system. Lockheed Martin Corp. of Bethesda, Md., is the prime contractor on the contract, which was awarded in 1993 and runs through 2000.

The government air traffic world is Unix-based, said Rick Jenderny, a program manager with Lockheed Air Traffic Management in Rockville, Md. "Most of our hardware is driven by government requirements," he said.

"It's been my experience with NT and PCs that they turn over every four to six months," Jenderny said. "What I see with the [Unix workstations] is they're easier to maintain and conduct configuration management. You find that with people like Sun and IBM, they try to take you with them."

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