Marketplace

Linux Offers Low-Cost Alternative to Unix-or-Windows-NT Dilemma

State and local government managers may be catching on to the advantages of Linux, a open-source operating system that caught fire in 1999 as an inexpensive way for technology managers to broaden their selection of operating systems beyond a mere choice between Microsoft Corp.'s Windows NT or Unix.

By some counts, there are more than 8 million Linux users worldwide. The advanced multiuser, multitasking operating system, introduced in 1990 by Linus Torvalds, is open source, allowing thousands of developers to update, enhance and debug it at will.

The city of Garden Grove, Calif., five years ago took the Linux plunge in a desperate attempt to chip away at the hefty estimates the city was getting from networking consultants. Officials downloaded a copy of Linux from the Internet, and today the city has about 10 departments, including housing, public works and the fire department, and about 350 PCs running on four Linux servers.

"It was so amazingly simple compared to Unix," said Bob Shingledecker, the city's information systems manager. "I think any city should consider using open-source software. We can load up on a Linux server faster than an NT server, and we guarantee that the Linux will outperform NT easily, hands-down," Shingledecker said.

A number of vendors now repackage and sell Linux code as part of a bundle of tools and services. Still, price remains a major attraction. The two main Linux vendors, Red Hat Software Inc. and Caldera Systems Inc., sell their latest versions on the open market for $49 per copy. In addition, Red Hat this month announced the availability of annual support programs designed to help customers protect their Linux investment. Caldera also offers technical support options for registered customers.

Although Linux has been a bit slower to catch fire in the government market, many observers are predicting a surge in use. "The impact to date has been fairly quiet, but the fact that it is free has attracted users at the state and local level," said Sandra Potter, senior analyst with the Boston-based IT consulting firm Aberdeen Group.

- Daniel Verton and Meg Misenti

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GIS Application Rolled Out for Trucking

Intergraph Corp. has teamed with C.W. Beilfuss & Associates, an Oak Brook, Ill.-based engineering software company, to offer Superload, a software package that state transportation departments can use to automate the issuance of permits for oversize trucks and other vehicles that need special approval to travel over the nation's interstates and bridges.

Superload simulates the path a truck will take, analyzing the route to determine if the vehicle falls within legal weight limits. "In the past, it would take weeks to process one oversize permit," said Karin Grigsby, Intergraph's transportation marketing manager. "With Superload, it can do the analysis in a matter of minutes."

The application uses Beilfuss' permitting capabilities with Intergraph's Microsoft Corp.-based GeoMedia software, which displays road geometry information and provides open access to spatial databases. About 40 state DOTs use Intergraph's geographic information system software products.

Intergraph is marketing Superload as a way for states to migrate from manual permit systems and paper maps and also as a technology that will make the roadways safer.

Superload also will allow DOTs to automate the billing of trucking companies and other haulers, which may translate into bigger savings. "And it frees up the bridge department to do the work they were trained to do-build and maintain bridges," Grigsby said.

Beilfuss has been in business for almost 25 years, providing computer-aided drafting and design applications for civil and structural engineering purposes, GIS software and database applications.

- Meg Misenti

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A Kick Start for Agencies

Managers in small to midsize agencies, school districts, sheriffs departments and city treasuries might want to try Project KickStart, a project management tool designed to help organize medium-size projects using a simple eight-step process.

Experience in Software Inc., a Berkeley, Calif.-based company, is readying Version 3.0 of the package. Features include pop-up calendars and Gantt charts for users' macro-scheduling needs. "For someone whose boss wants quick action on a project, here's a secret weapon," said Roy Nierenberg, the company's president.

The software can handle projects with up to 750 tasks, and users can map out projects and save information as Hypertext Markup Language files for posting on agency intranets. Project KickStart also generates to-do lists and presentation-ready reports and can link to Microsoft Corp.'s Project and other scheduling and project management tools.

Jim Parry, a school district superintendent in Carson City, Nev., is one of more than 2,000 state and local government users of the software. "The feedback I've received is that it is very easy to use, selfexplanatory...and it takes little or no time to adapt to it," he said.

- Meg Misenti

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Buying Strategies

Massachusetts Goes for Second 'Big Buy'

Massachusetts recently closed the books on its first-ever midyear "Big Buy"-an attempt to repeat the success of its traditional year-end buying spree by getting computer vendors to pony up to state and local buyers with their best hardware and software deals twice instead of once a year.

The Big Buy program, during which the state pools available funds for computer purchases in order to drive better bargains, has been considered a successful buying strategy, proving to state contracting officials that agency buyers were willing to wait for better deals. "Agencies will hold off on buying because we do something extra special," said Dick Mordaunt, director of information technology and office products for Massachusetts' Operational Services Division.

Of course, "extra special" usually translates into better prices--up to 30 percent--on state-of-the-art systems.

A second Big Buy, which wrapped up in February, gave agencies another chance to acquire PCs and software at discounted prices. The program was well-timed for agencies that were behind in their Year 2000 purchasing or simply in no position to wait for the state's annual June Big Buy. Mordaunt let contractors know his office was going to make an additional aggregate purchase of PCs and would choose only two hardware vendors. "We didn't want price to be an obstacle to buying PCs," Mordaunt said. "So we chose the two best prices."

While the overall purchase was modest--about 1,500 PCs compared with last year's count of 4,500--Mordaunt was pleased with the deals.

One of those buyers was Rich Duggan, director of information technology for the Massachusetts Trial Courts, which needed about 300 PCs for an automation project. "The real benefit of the Big Buy is it's a tremendous incentive to vendors to put their best foot forward in terms of pricing their systems," he said. Duggan even went back to other vendors to see if they could match the Big Buy price. They couldn't.

But while the Big Buy strategy works for Massachusetts, it's not for everyone. It's not easy getting multiple agencies to make purchases all at once. As a result, other states have opted for concentrating their purchasing power in a single contract that is open year-round.

Joyce Murphy, Missouri's director of purchasing, said her state struggled with PC contracts for years before opting for creating a statewide contract with Stamford, Conn.-based GE Capital Information Technology Solutions. "I have to applaud [Massachusetts officials] on how they have been able to get their agencies together to purchase at one time," Murphy said. "One of the biggest challenges we had was getting good pricing...and the reason was usually that we were not doing a good job leveraging our buying power." Still, from time to time, Missouri will hit up GE Capital for further discounts on big purchases made from the contract.

California's Department of General Services also is investigating how it might pool its purchases more effectively. "We are currently developing a new purchasing system where [volume buying] could become a reality," said DGS acting director Dennis Ericson. California agencies purchase off the California Multiple Awards Schedule or order PCs from one of three state computer stores. The stores and CMAS lower prices based on volume.

"We would never replace the year-round buys we have now with the stores," Ericson said. But he admitted that volume buys provide states with leverage to force vendors to come up with their best prices. "How could I say that's not true? It makes sense," he said.

Massachusetts is ramping up for its end-of-year Big Buy. "We expect significantly larger quantities. This may be our biggest buy ever," Mordaunt said. "And we'll get the best prices ever."

- Meg Misenti

Crossing State Lines for a Really Big Buy

To get good deals on desktop computers, some states also are looking to aggregate purchasing across state lines. For instance, Massachusetts is in discussions with New York on a single contract for desktop computers that agencies in either state could tap.

The two states are looking at two models: using a reseller distribution channel or buying direct from a company. Hardware vendors in the running for the deal are Micron Electronics Inc., Dell Computer Corp., Gateway Inc. and ASAP Software Express Inc. "The opportunities are there to do cross-state buying or utilization of another state's contract," said Gary Lambert, Massachusetts' deputy purchasing agent.

- Meg Misenti

Big Buy Deals

Hardware

Dell Computer Corp. 350 MHz

Pentium II with a 17-inch monitor

List price: $1,800

Big Buy price: $1,235

NEC Computer Systems Division 350 MHz Pentium II with a 15-inch monitor

List price: $1,569

Big Buy price: $1,207

NEC 333 MHz Intel Corp. Celeron processor with a 15-inch monitor

List price: $1,280

Big Buy price: $795

Software

Symantec Corp.'s Norton AntiVirus

List price: $37.62

Big Buy price: $9.79

Attachmate Corp.'s e-Vantage

List price: $267

Best Buy price: $120

Platinum Technology Inc.'s

TransCentury Office Year 2000 tool

List price: $109 per desktop

Best Buy price: $43 per desktop (for 150 or more desktops)

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Market Trends -- ERP

Vendors, Consultants Ride State & Local ERP Wave

When was the last time an enterprise resources planning (ERP) company knocked on your agency's door? If it wasn't recently, you might be too small; otherwise, just wait a few weeks. That's because state and local agencies represent the next major business wave for the big software vendors and the consulting firms they partner with.

To capitalize on the demand, two of the biggest players in the ERP market, Andersen Consulting and PeopleSoft Inc., said this year that they would form an exclusive alliance to work only with each other in making ERP deals in the public sector. The arrangement is intended to leverage the firms' depth in the market.

Whether the alliance gives the partners a leg up remains to be seen. For one thing, it bucks a trend whereby ERP vendors and consultants have been pairing up on a deal-by-deal basis. "There is a real dating game going on out there, and we used to play," said Randy Hendricks, a managing partner in Andersen's government and education practice. "It is all a matter of who is going to partner with whom on what deal."

Such partnerships are important in this market. That's because ERP is a relatively new offering, a mega-software solution that standardizes financial or human resources operations on a single platform to help improve operations and accountability. Other leading developers of ERP include J.D. Edwards, Oracle Corp. and SAP America Inc.

Because ERP implementations are complex, customers often rely on consulting firms such as Andersen, Deloitte & Touche and KPMG LLP to function as integrators. Indeed, consulting fees on such deals typically outstrip software costs by 15 to one, according to SAP. That makes the choice of which consulting firm to work with a key decision for agencies. "Governments want to be treated as if their applications are unique," said Rishi Sood, Dataquest/G2R's principal analyst for vertical markets worldwide. "And in fact, government solutions do have to be tailored because governments are special in terms of their needs."

PeopleSoft and Andersen are betting their alliance will be viewed as an added value to such customers. "What this has done for our reputation is focus our ERP practices at a much deeper level in terms of skill," Andersen's Hendricks said.

Others, of course, take a different view. Pittsburgh-based Deloitte & Touche has decided against exclusive partnerships. "We have not chosen to go that route," said Rick Merolla, senior manager in the firm's public-sector enterprise applications solutions group. "The software is the solution, and we feel like whoever the client picks to provide software, we can work with that vendor.

"We think this kind of non-exclusivity helps us because we can remain unbiased and often help a client pick a package that meets their needs without them having to worry that we have some kind of under-the-table agreement with a software vendor," Merolla said.

J.D. Edwards also has no exclusive partnering arrangements. Instead, the Denver-based company teams on a case-by-case basis. "It depends on the number of applications and the number of users involved," said Allen Winder, vice president and general manager for public services. "We think governments are looking for partners that can provide a cost-effective solution--which puts their ideas into action and allows a system to remain the solution. Also, our ability to mitigate a government's risk has always been one of the things that determines which deals we are going to win."

On the other hand, partnering may be especially critical to SAP, which introduced its R/3 line of products in the United States a couple of years ago.

"We may be a little new for state and local people, but we have been partnering with a number of firms, and we think that allows us to promise the best of both worlds-a strong application recognized worldwide and the value of a partner that knows the public utility, human resources and other government markets," said Bob Salzucci, president of SAP Public Sector.

A wildcard in the mix of ERP players is Oracle, which has sold its Financials line of software to government agencies for more than a decade. While Oracle is active in the ERP dating scene-with no exclusivity-the company has been pushing its own consulting capabilities.

"There have been quite a few occasions where we have won our own deals, but we also pair up with the consulting arms of large accounting firms, especially in the cases of those customers looking for continuity from their existing relationships with those accounting firms," said Wayne Bobby, executive director of enterprise application solutions for Oracle Service Industries, Reston, Va.

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