Government market: Global, outsourced
- By Dan Verton
- May 23, 2000
BRUSSELS, Belgium — Similar to the "Dulles Corridor" outside Washington,
D.C., a cluster of high-tech companies has taken root here in an industrywide
effort to take advantage of the burgeoning market in European government
information technology services.
The main thoroughfare that connects Brussels International Airport and
NATO headquarters with the city's cultural center is lined with the familiar
names of U.S. high-tech companies. The likes of IBM Corp., Sybase Inc.,
Oracle Corp., Electronic Data Systems Corp. and Compaq Computer Corp. have
erected large corporate facilities to position themselves for the growth
markets in European commercial and government IT services.
Most of these mainstays of the U.S. IT scene have made a substantial
commitment here. EDS, for example, has a staff of more than 1,000 personnel
dedicated to the European market, according to a NATO source. Likewise,
Compaq recently deployed a contracting team to handle NATO business and
has established liaison positions within almost every NATO country, according
to the source.
Sources with extensive experience working in Europe's high-tech marketplace
said there are many opportunities for technology firms in Europe. The British
government, for example, has outsourced as much as 20 percent to 30 percent
of the IT services that support many of its core functions, including the
U.K. equivalent to the U.S. Internal Revenue Service and Customs Service.
And while the nature of government services is changing here in Europe,
so is Europe's concept of IT services. Many government agencies throughout
the continent are forcing traditional services and consulting companies
to enter the integration business, according to a source familiar with European
"Rather than just having a company provide them with the knowledge of
how to do something, governments and commercial customers are now telling
them to go ahead and do it for them," said the source. Even the well-known
consulting firm Andersen Consulting has dipped into what the source called
the "implementation" phase of IT services contracting in Europe.