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Rematch in San Diego<@VM>DC Tech Council Gains Clout<@VM>CIOs Agree: Y2K Is Top Concern <@VM>EDS Adds Gov't Know-How<@VM>"Internet in a Box"<@VM>MicroStrategy Scores Big Win<@VM>SAIC Cashes In<@VM>Logtec, C-Cubed Make Deals

The three information technology giants that battled for Connecticut's lucrative outsourcing contract will duke it out again, this time in San Diego County.

Electronic Data Systems Corp. came out on top last December, beating Computer Sciences Corp. and IBM for the contract to run Connecticut's information technology services. EDS and state officials are now negotiating details of the seven-year $1 billion contract.

But CSC, EDS and IBM are leading teams striving for another $1 billion contract — this one valued at $100 million annually over 10 years. Planned for award in July, the contract would make San Diego the first county in the United States to outsource all of its IT services.

On the CSC team are Lucent Technologies Inc., Pacific Bell and Science Applications International Corp. The EDS team includes American Management Systems, Cox Communications, Gateway Inc. and Qualcomm Inc. Joining the IBM team are AT&T, Lockheed Martin Corp., TRW Inc. and Xerox.
The Washington D.C. Technology Council has rounded up more than two dozen charter members since its formation last month. Joining Bell Atlantic Corp., Crestar Bank, MCI WorldCom and Science Applications International Corp. is Pepper Hamilton LLP. The Washington-based law firm became the newest member Feb. 11.

One day earlier, Jay Young, president of Thor Group Ventures LLC of Michellville, Md., was selected president of the council, whose aim is to help the District of Columbia on policy formation as well as economic and business development and work force issues.

Marie Johns, president and CEO of Bell Atlantic Inc., is chairman, and Andy Jacobson, president of Post-Newsweek Business Information Inc., which publishes Washington Technology, is vice chairman. Also, Martin Irvine of Georgetown University is secretary, and Thomas Kelley, executive vice president of Crestar Bank, serves as treasurer.
A new survey of federal chief information officers by the Information Technology Association of America shows that year 2000 problems continue to trouble agency CIOs.

Y2K is a "tremendous resources drain," according to results released Feb. 16 from ITAA's survey of 25 CIOs and information resource managers with 19 agencies.

Also ranking high with CIOs are work force shortage issues and pent-up demand for services that have been delayed because of work related to software fixes.

Both of these issues will help drive agencies to do more outsourcing, according to the survey.

Other topics of interest to CIOs are Web-based applications, e-commerce solutions, network security, privacy and infrastructure protection.
Electronic Data Systems Corp. of Plano, Texas, will pick up several hundred million dollars of government business in a complex deal with MCI WorldCom that is expected to close in April.

EDS is buying MCI Systemhouse, an Ottawa-based systems integrator, under a $1.65 billion deal that will see EDS outsource its global network to MCI. In exchange, MCI will outsource its applications development and IT maintenance services to EDS.

Systemhouse, which had about $1.7 billion in 1998 revenue, does not break out figures for its government business, said Tim Grace, an MCI spokesman, who allowed that it is "significant."

Another source said Systemhouse government revenue was close to 50 percent of total revenue in 1997. Its government customers include Canada's Department of National Defense, Ministry of Communities and Social Services, the Mississippi Department of Transportation and the New Jersey Transit Authority.

EDS has not revealed its plans for integrating Systemhouse operations, said spokesman Randy Dove. Some 12,000 MCI employees will become EDS employees, and 1,000 EDS employees will work for MCI.
Scientists at the National Institute of Standards and Technology, Gaithersburg, Md., have developed a software tool that allows engineers to test their products under a wide variety of artificial Internet conditions.

This should be good news to companies that want to develop advanced products and services for the Internet, which can be rather ... ahem ... unpredictable.

The NIST Network Emulation Tool (NIST Net) enables testing of the effects of Internet performance scenarios early in the product development cycle, allowing engineers to design products that work well in a variety of network conditions.

Companies and universities are using NIST Net, also known as "Internet in a box," to test everything from business applications to games, NIST officials said. A version that supports more sophisticated testing is planned for release in March.
MicroStrategy Inc. of Vienna, Va., has landed a one-year contract worth $934,000 from the Department of Housing and Urban Development — its largest government win since entering the federal market last October.

MicroStrategy beat out Cognos Inc., Sagent Technology Inc. and Brio Technology Inc. to offer HUD agencywide software for analyzing information about communities and housing trends. The contract initially covers 1,500 users, but options could expand that number to 20,000.

In other MicroStrategy news, the company sold 2 million shares of its stock Feb. 10 at $27 a share. MicroStrategy plans to use the proceeds for working capital and general corporate purposes.
Science Applications International Inc., San Diego, cashed in another piece of its stake in Network Solutions Inc., selling 4.5 million shares at $170 each. The Feb. 9 move cut SAIC's position in Network Solutions from 72 percent to 45 percent.

SAIC officials declined comment on how the proceeds will be used. Network Solutions, which registers Internet domain names, has seen its stock climb from $18.63 to $260.38 during the last 12 months. Its stock closed at $158.88 Feb. 12.Even small IT businesses are playing the merger and acquisition game.

Logtec Inc., a Fairborn, Ohio, defense contractor, bought Micah Systems Inc., also of Fairborn, Feb. 2. Micah brings 45 employees to Logtec's 200. Both companies provide systems integration, process re-engineering and advanced technology applications. Projected revenue for 1999 is over $25 million.

C-Cubed Corp., a Springfield, Va., defense communications systems firm, also hit the trail. It bought Computing Analysis Corp., Arlington, Va., a network management company, in January. The combined company will have 250 employees.

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