Pennsylvania's Bold Buy

This summer, in a move that shook up its procurement patterns, Pennsylvania standardized the core desktop functions of 40,000 state workers on Microsoft Corp. software. Under the three-year, $23.6 million deal, which covered the operating system, the office suite and e-mail, the state expected to save $9.2 million and reap big productivity gains.

Six months later, both sides are rolling out software and making the deal work. But it has been an experience they say other states should not take lightly.

"Migrating a diverse enterprise to a single standard is not an easy thing to do," said Larry Olson, the state's chief information officer. "It is technical, organizational and a human nature thing. You need to understand why you are doing it and not just go out and do it because it is popular."

Essentially, the deal is designed to save money and make it easier for state agencies to share information. Before, agencies purchased and deployed software independently, which meant considerable variation in types of products and software versions that were used. This caused problems exchanging and opening documents, e-mail failures and headaches for the technical staff, which had to support and train users on different products.

For guaranteeing Microsoft 40,000 seats over three years, Pennsylvania gets the latest software upgrades, $12.8 million in products and services for Pennsylvania schools, and a full-time senior Microsoft executive assigned to oversee migration decisions. In return, Microsoft will learn how to migrate a government enterprise.

"This is the first time that Microsoft has worked with an entire state as a single entity," said Michael Ferreri, manager of Microsoft's Enterprise Customer Unit. "It's a smart thing that the Ridge administration has done. They made it easy for Microsoft to work with them."

The challenge will be in getting such a large, multifaceted organization to migrate to common platforms. For example, creating a common messaging architecture and transitioning 40 state agencies to Microsoft Exchange will take considerable cooperation between agencies and partners. "The commonwealth has a lot of pre-existing systems in place on different platforms using different hardware and different networks," Ferreri said. "We certainly have a lot of work ahead of us."

The ground work for the deal began three years ago when Gov. Tom Ridge entered office and the state first looked at pulling agencies together to function as an enterprise. At the time, "technology was a mystical thing that no agency managers got into," Olson said. "The only money available went into mainframes."

What's more, agencies operated independently used different software products and versions, and there was no communication between agencies on product selection or technology investment strategies. "To me, it was the typical government bureaucratic approach to technology," Olson said.

In choosing a partner, Pennsylvania invited software vendors Corel Corp., Lotus Development Corp., Netscape Communications Corp. and Microsoft to enter into discussions. Each was asked two key questions: What would it do as a partner to make Pennsylvania a model government for the 21st century, and what would it do to benefit Pennsylvania communities, specifically education?

"Initially, they came back saying, 'Can't you just tell us what you want to buy?' and we said no," Olson said. "We're making a policy decision about who is the strongest partner to bring us into the 21st century." While all the companies had a hard time responding, "Microsoft best understood us as an enterprise, what we wanted to do and how we wanted to leverage our enterprise to benefit Pennsylvania," Olson added.

Standardizing on NT

Under the three-year agreement, Pennsylvania will standardize on the Windows NT operating system, Office 2000 for office suites with Outlook 98-the client-side version of the Exchange mail system-and Exchange 5.5, the back-end e-mail system.

The state plans to migrate all 40,000 seats to Windows NT by July 1, 1999. Migrating office suites and e-mail will be staggered over three years, with the state standardizing 15,000 seats on Office 2000 in the first year, 10,000 seats in the second year and 15,000 seats in the third year. About 15,000 state agency PCs already run Office-about 60 percent of all PCs that have office suite software installed.

The phased rollout is expected to save the state millions of dollars, with the agreement allowing the state to lock in software prices at 1998 levels and get software upgrades at no charge. All licenses will be purchased through Dell Computer Corp. The enterprise agreement covers only the desktop operating system, office suites and e-mail software. Other products used by agencies, including other Microsoft products such as Visual Basic, will continue to be purchased through select agreements on a product-by-product basis.

State IT officials are doing high-level design work for the desktop network. "We will have the major plumbing deployed by the end of the first quarter 1999 and will start phasing in agencies-connecting them to the major plumbing-beginning in April," said George White, director of Pennsylvania's Bureau of Desktop Technology and the person directly overseeing the Microsoft project.

White's office also plans to automate software deployment. The state will use 70 servers throughout the state to push the software to agency desktops and use automated scripts to install it. The proj-

ect so far is on schedule. "We are right on time, and even though there have been challenges, we are meeting them. So far, so good," White said.

Other states are looking into enterprise agreements as well. Indiana and New Mexico contacted Pennsylvania, asking about the number of seats covered and potential procurement problems arising from the deal-questions that did not surprise Olson. "More and more CIOs are coming from the business side who look at technology as a business too," he said. "And they are starting to figure out what they need to do to create an enterprise."


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