Deal Makers, Deal Breakers and Nitwits

Deal Makers, Deal Breakers and Nitwits

Steve LeSueur

Since the publication of our last issue trumpeting Affiliated Computer Services Inc.'s purchase of SCT Corp.'s state and local government unit ["ACS Joins Elite With Purchase of SCT Unit," July 16] ACS surprised the government IT community with another deal, announcing July 19 it is buying Lockheed Martin Corp.'s state and local unit for $825 million.

The proposed acquisition, which is expected to close within 45 days, propels ACS to the front of the state and local pack. ACS will be one of only three companies ? the other two are Electronic Data Systems Corp. and IBM Corp. ? with more than $1 billion in annual revenue from state and local government business.

Speaking of surprises, American Management Systems Inc. was hit with a $350 million lawsuit by the Federal Retirement Thrift Investment Board, which alleges AMS misled the board and failed to perform on an information technology modernization project.

The huge lawsuit is reminiscent of the nearly $1 billion lawsuit ? yes, that's billion ? brought against AMS by Mississippi in April 1999 for a failed tax system and settled last year by AMS for $185 million.

"It's uncanny the way this company can explode once a year," one analyst said regarding the new lawsuit.

Both the AMS and ACS stories can be found on our front page, where they are joined by an article examining Larry Ellison's attack on middleware. Calling middleware absurd and a "nitwit idea," Oracle Corp.'s chief executive officer argues that government agencies should replace their multitude of databases with one central database.

You can guess whose database he thinks they ought to use.



Techtoons

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