Systems Integrators Move Onto Telecom Turf

Systems Integrators Move Onto Telecom Turf

Sandy Bates

Many federal agencies are looking to get their telecommunications and systems integration services from the same company, a rapid and growing trend that could dramatically change the telecommunications market.

The General Services Administration's customer agencies, for example, are not interested in having one contract for telecommunications and another for systems work, said Sandra Bates, commissioner of GSA's Federal Technology Service. Agencies want one-stop shopping.

"The secret password is convergence, [making] a handshake with many seem like a handshake with one," she said.

Warren Suss, who follows the telecommunications industry for Suss Consulting Inc. of Jenkintown, Pa., points to the Navy-Marine Corps Intranet project as a prime example of the converging telecom and integration markets.

Systems integrators, not telecommunications companies, led the teams bidding in the five-year, $4.1 billion NMCI program to provide voice, video and data services, networking, training and equipment to some 350,000 sailors and Marines around the world.

Electronic Data Systems Corp. of Plano, Texas, was awarded the contract in October 2000, while WorldCom Inc. of Clinton, Miss., serves as a major subcontractor on the project.

"Until recently, the competition in the federal telecom arena followed the rules of technological détente," said Suss at a Feb. 22 conference on federal telecommunications. "The carriers owned the transport. The integrators owned the applications and the applications infrastructure."

But federal agencies are no longer viewing telecommunications and information technology as separate systems, he said. Instead, agencies are seeking solutions that provided bundled telecom and IT services in a single package.

This is leading to a new era of direct competition between the carriers and the integrators for control of the converged telecom and application market segments.

"The traditional government transport leaders ? the carriers and their government channel partners ? that can't move rapidly into the newly converged markets may find themselves with a significantly reduced role on the big deals that, until now, have represented their bread and butter," Suss said.

Bates, speaking Feb. 23 at the same conference, predicted that convergence is fast approaching. "This is not the 10-year plan. This is like the one-, the two- and the three-year plan," she said. "We're going to see some quick movement."

Bates' agency is responsible for FTS2001, the governmentwide long-distance contract, and the Metropolitan Area Acquisition contracts, which select local telecom providers in numerous cities across the United States.

Regarding the ongoing efforts to complete the transition of federal agencies from FTS2000, the original federal long-distance contract, to FTS2001, Bates said the changeover is about 88 percent complete.

"All the easy things have been done," she said. Some of the most complex changes are still under way, such as installing hubs and nodes on large, complex data networks, providing service in remote locations and establishing services that require contract modifications.

Because of the difficulties experienced by agencies as they transitioned from FTS2000 to FTS2001, Bates said the federal government likely will not undertake large-scale transitions in the future.

But vendors who think that winning a contract gets them "in for life" should drop that notion, she said. Government agencies have learned their own lessons from the challenges presented during the transition, have more choices available and will be better prepared to change from one carrier to another, if necessary.

Paul Brubaker, deputy chief information officer for the Defense Department, called the NMCI project a dramatic, reform effort.

"NMCI, if it's successful, could really help take the pressure off Navy budgets. We've been spending billions and billions of dollars down a rat hole, on applications without the infrastructure to support them," he said at the conference.

The military is taking a "strategic pause" in issuing task orders for NMCI to provide the chance to assess progress, he said.

"If we're pursuing the wrong methodology or the right one, it makes sense to assess whether to slow down, stop or accelerate," said Brubaker. But those who are seeking to delay NMCI are "antibodies to change," he said.

Brubaker offered two suggestions for companies seeking defense contracts.

First, the services are looking for the business case, including the incorporation of best practices and demonstrable, measurable outcomes as would be expected in the commercial arena. Companies shouldn't try to sell technology, but instead should explain how they are going to solve the Defense Department's business problems.

"Here's a sign: The celebrations when you win a contract should be small. When you deliver, they should be big," Brubaker said.

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