Editor's Note

Calling Out for Government Business<@VM>TechToons

Trish Williams

AT&T Corp.'s planned purchase of GRC International Inc., Vienna, Va., marks the latest example of consolidation in the government information technology marketplace, with niche-related plays once again at the forefront of the action.

Washington Technology Staff Writer Nick Wakeman's cover story on the $221 million cash deal, which company officials expect to wrap up in the next two months, reveals that AT&T has been quietly knocking on doors for a while.

Right now, AT&T officials are not talking about future deals.

But one year ago, an AT&T executive with the telecom giant's government markets business told Washington Technology his company would grow its professional service business, take advantage of the thrust toward outsourcing and bring its commercial practices to the government market.

Why? Because that is where AT&T executives saw the possibility of "double-digit growth."

With more than 90 percent of its business coming from the Department of Defense, GRC brings with it noteworthy systems integration and engineering services support expertise along with annual revenue of roughly $200 million.

While that is chump change compared with AT&T's $64 billion in 1999 annual revenue, GRC has strong ties to key defense agencies that will play a dominant role in high-speed data networking markets of the future. And it does not hurt that Gary Denman, the president and chief executive of GRC since 1998, hails from the Defense Advanced Research Projects Agency.

So let's watch as AT&T Corp. increasingly targets business in information assurance and critical infrastructure protection - areas the federal government now stamps top priorities - as it reaches out to touch special government needs, including the command, control, communication, computers and intelligence, or C4I, community.

Trish Williams

williams@pnbi.com

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