Giant steps toward e-government

As state and municipal governments restructure technologically to save money,

improve efficiency and deliver better services, two technology giants recently

formed dedicated units to tap this lucrative market.

Microsoft Corp., the world's largest software maker, established a

dedicated state and local team last spring, while Hewlett-Packard Co., the

world's second-largest computer-maker, created a similar sales unit a year

ago, which is just coming up to full speed. The firms are part of an expanding

commercial interest in the government sector.

Representatives from both companies said the state and local market

has grown to a point where focused attention is necessary to address the

market's unique needs and increased use of electronic government applications.

"I think there's a huge amount of money out there," said Bob Gumport,

the head of HP's unit. "In the past, we've treated the state and local market

very opportunistically. Now, we have dedicated people to that market instead

of as part of other business units." HP's most successful programs, he said,

are focused on a particular market, allowing the company to be more attentive

and accountable.

State and local government accounts at Microsoft were divided among

18 nationwide sales districts, said Frank Giebutowski, who leads Microsoft's

unit. Over the past two years, resources to the state and local market increased

by 300 percent, but that happened because of independent decisions by the

districts' general managers.

"What the aggregation of Microsoft's state and local government assets

brings to the customer is that we are easier to do business with because

the salesperson, the pre-sales consultant, the consultant, the managers,

the support team, and the licensing resources all live and breathe government

every day," Giebutowski said. "Government is the team's only focus."

Both Giebutowski and Gumport said governments operate differently from

commercial clients because of legal constraints, budgeting processes and

procurement rules. Both companies structured their state and local teams

in a similar fashion.

Microsoft has teams of seven to 11 people in four geographic regions,

while HP has three geographic regions with eight to 10 people. Both companies

increased technical expertise and other support services for the state and

local sector and both companies developed partnerships with other companies

as a way to penetrate the market.

Gumport said a network of partner-ships helps with delivering end-to-end

solutions quickly and effectively. For example, he said HP is partnering

with a Utah company called Kiva that creates automated permit and inspection

systems. It is also working with Ariba Inc., BroadVision Inc., TekInsight.com

Inc., Unisys Corp. and a host of other companies.

A partner model also drives Microsoft, said Giebutowski, citing deals

with Andersen Consulting, Compaq Computer Corp., KPMG International, Carta

Inc., Link2Gov Corp., Netgov.com Inc. and American Management Systems Inc.

Giebutowski said Microsoft's advantage over competitors is the speed and

cost of delivering and implementing services.

"It's because Microsoft provides an open, flexible architecture that

is relatively easy to deploy and is cost- effective," Giebutowski said,

adding that as more states sign statewide contracts to standardize Microsoft

products, they're also realizing total cost of ownership, or TCO, benefits.

"For example, the Commonwealth of Pennsylvania recently completed a

TCO study that examined how much money the state is saving by using the

Exchange e-mail server platform," he said. "Pennsylvania found that government

agencies were saving at least $7 million to $8 million a year by using Microsoft

Exchange. This data translates into better services for citizens, more efficient

government and less cost."

In addition to Pennsylvania, Giebutowski said Colorado, Arizona and

Florida have also signed statewide agreements to standardize their desktops

on the Microsoft platform.

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