10 companies to watch
- By Graeme Browning
- Sep 17, 2001
Last year, the push to move agency operations online made e-government the hot topic for up-and-coming companies seeking to grab a piece of the $45 billion federal information technology market. The recent rash of dot-com failures brought down some of those high-flyers, however, and savvy newcomers shifted their focus from providing IT services to providing fresh solutions to long-standing federal problems.
The companies on this year's list of 10 — compiled with the aid of key resellers, technology analysts and knowledgeable federal IT industry experts — will become the ones to watch as the government demands a bigger bang for its technology buck and faces losing half of its IT workforce to retirement in the next five years. These companies offer technologies — such as wireless devices and knowledge management systems — that could improve worker productivity, helping ease the burden of a shrinking federal workforce. Other companies offer solutions for agencies looking to impose enterprisewide IT architectures that could save the government hundreds of millions of dollars as it standardizses IT operations. And securing government information systems, of course, continues to encourage innovation there.
Lean economic times are driving manufacturing, software and service companies to concentrate more on the federal contracting market — this goes for both established players and up-and-coming firms. Although large systems integrators and service firms still dominate the market, newer companies are using the momentum of initial successes in the private sector to vie aggressively for the attention of government buyers, experts say. "The federal government is very sedate. Change happens very slowly," said Olga Grkavac, executive vice president of the Information Technology Association of America's Enterprise Solutions Division. "But as Wall Street is finding out, the federal government tends to be recession-free."
Many of the companies on this year's list — such as Access360, a maker of access management software — opened offices in Washington, D.C., only a year or two after the ink dried on their first major commercial contract. Those that don't have a Washington presence yet, such as Research In Motion Ltd. (maker of the BlackBerry wireless device) and software developer SSB Technologies Inc., have been quick to form partnerships with some of the best-known names in the federal reseller community. All of them closely monitor the latest developments in federal IT policy — such as the Section 508 requirement that people with disabilities must be able to use federal Web sites — and move products to market quickly when they see a potential opening.
This ability to react in "real time" makes their offerings and services stand out in the array of choices available to federal technology executives, experts say. "The companies that will fare best in this market are the ones who are anticipating the demands of issues such as Section 508 and security," said Deirdre Murray, group manager for market development with Sprint Government Systems Division. "They'll be the ones who are anticipating the market and being swift of foot about it, as well."
New leadership in the White House also gives impetus to the search for new perspectives on technology's role in managing the federal workforce. Many Clinton administration appointees had held their posts since the early 1990s, and Grkavac said, "in essence, they were ‘pre-Internet.'"
"We knew a year ago that whoever won the election would bring in people who understand computers, and they would make a top-down push for more IT use," she said.
The Bush administration's intent, outlined in the fiscal 2002 budget proposal, indicates that the White House would set specific performance goals for select programs across government. Mark Forman, associate director for information technology and e-government at the Office of Management and Budget, reiterated that point in July, saying in a speech that the White House plans to push agencies to align their e-government initiatives with management reforms. Forman warned there's little chance that the $45 billion spent annually on federal IT will increase.
"That's the good news/bad news part of this scenario," Grkavac said. "The government will use more IT but not necessarily by making new funding sources available."
In addition, OMB Director Mitchell Daniels Jr. recently instructed agency chiefs to develop plans to reduce the number of federal managers during the next five years — cuts that, combined with President Bush's campaign promises, could amount to 40,000 workers. This means government will demand that its IT investments produce more results than ever, according to the experts.
"The American people still want good service from federal agencies, but they don't want them to grow in size," said Renny DiPentima, president of SRA International Inc.'s consulting and systems integration unit, and former deputy commissioner and chief information officer at the Social Security Administration. "With less people on staff, but the workload there and growing, the only thing you can do is make your people more productive. And you do that with IT," he said.
‘Office in the Field'
Small wonder, then, that a passion for wireless devices is sweeping the ranks of federal executives. With laptop and handheld computers, government workers will always be able to access the office anywhere and at anytime, thus increasing productivity, IT experts say.
In recent years, federal workers have become not only increasingly mobile but also dependent on both e-mail and central databases to do their jobs efficiently. "Three to five years ago, we saw the transition toward portable systems and an accompanying need for modems," said Joel Lipkin, senior vice president of sales and customer support for GTSI Corp. "Now we're fielding technology that makes it even easier to stay in contact with your basic information systems and your e-mail stream as you travel anywhere." Adds another knowledgeable federal IT analyst: "The next hot application in government is going to be ‘the office in the field.'"
BlackBerry — a pager-sized device that includes a tiny keyboard, a thumb-operated trackwheel, a small backlit screen and an always-on Internet connection — has caught the fancy of federal executives this year. Although BlackBerry has been on the GSA schedule and other agency purchase lists for less than nine months, customers already include the House of Representatives, several divisions of the departments of Defense and Health and Human Services, and even the White House.
"I see people in government walking around with BlackBerries all over the place," said French Caldwell, research director for Gartner Inc.'s project for technology and public policy. "In one Navy command, the admiral was so excited about his that he would stop people in the halls to show them how it worked."
Research In Motion executives say the BlackBerry's popularity stems not only from its ability to send and deliver e-mail messages to workers no matter where they are, but also its ability to coordinate and update worker's electronic calendars seamlessly and — most important — securely. "When we first started visiting federal customers, we realized that, especially in the defense community, they were interested in wireless but they thought it too unsecure," said Anthony LeBlanc, the company's head of government solutions. In March, the BlackBerry received a certification from the National Institute of Standards and Technology that its technology had military-grade security features, and "that was really the door-opener for us."
Security and the pressure to move federal agencies toward enterprise architecture — that is, standardized computer systems across an organization — are two other issues generating innovative IT solutions this year. Sigaba Corp. has developed a secure e-mail system that operates on top of its public-key infrastructure, but is much easier to install and operate, according to the company's well-connected financial backers.
In the enterprise arena, Access360, Appriss Inc. and FreeBalance Inc. are making a name for themselves by combining technologies to cut costs. Access360, a 2-year-old company based in Irvine, Calif., makes a system that centralizes and automates the process of granting access to sensitive documents and applications across more than 50 computing systems in the federal government. User access rose to the top of federal IT executives' priority lists last fall after the General Accounting Office issued a report disparaging many agencies' security procedures for user access.
In addition, with the government's many stovepiped systems, a systems dministrator often must wait for proper notification from an agency's human resources department or payroll division before granting system access to new employees, expanding or constricting access for current employees or canceling access for former employees. Notification can take days, "and the federal government can't afford to let these people sit idle in the meantime," said Todd Leto, Access360's director of government sales. The Labor Department and HHS use the company's enRole software, and DOD is running three pilot programs with the product.
Such centralization is crucial as government IT efforts move toward the citizen-centric model the Bush administration envisions. "So far, we've been thinking of e-government as the government defining when the citizen gets services. In the citizen-centric model, the citizen says to the government, ‘Here's how I want you to respond to me,'" said Joe Leo, corporate vice president of Science Applications International Corp., and former CIO of the Agriculture Department. "To do that, you have to start thinking in a horizontal manner. You have to figure out how clusters of like activities can gang together, get synergy and provide information in one place, but at the same time cut across various agencies."
FreeBalance hopes to generate that synergy by releasing a new product called eGrants, a version of peer-to-peer technology that will enable file-sharing among users. The company has been in the e-government marketplace since the early 1990s with its e-financial management software and counts 12 agencies including the departments of Transportation and State, GSA and the Coast Guard — among its customers.
EGrants automates the award of government contracts, monitors financial transactions for the duration of the contract and analyzes the attainment of program goals. It will be the first FreeBalance product to use peer-to-peer technology. "Peer-to-peer relies on the development of a ‘community of interest' among people who want to share information on a one-to-one basis and don't necessarily want to go through a gatekeeper to do that," said Gordon Graham, FreeBalance's vice president of marketing. "We found [that] grant recipients and applicants make an ideal community of interest, and we want to provide them with a forum to leverage their experience and their combined expertise."
Generation Y Learning From Generation Gray
In addition to sharing access to documents and information, federal managers will have to be able to share expertise as older employees leave and are not replaced, the experts say. "On one hand, you've got all these people with institutional knowledge retiring. On the other hand, you have ‘Generation Y,' [which] doesn't want to work for government," Gartner's Caldwell said. "If you don't have Generation Y coming into government and you have ‘Generation Gray' leaving, there's a big issue of who are the experts, who knows how to do what and how do we leverage their expertise?"
Even though it's only six years old, Autonomy Corp. already has 35 federal customers using its knowledge- management software, including the departments of Energy and Labor, NASA, GSA and several DOD divisions. In addition to providing a natural-language search engine, Autonomy's technology also analyzes and categorizes unstructured information based on key concepts and usage patterns. The program's most popular feature, however, is an "intelligent agent" that not only can be programmed to collect information about specific concepts, but also can automatically expand and refine its search as it gathers material.
"These agents can create dynamic communities of interest, which helps maintain the knowledge base," said Rita Joseph, Autonomy's vice president for the public sector. "When someone new comes on the job, you can use intelligent agents to help them get up to speed faster and better."
Software developed by Tacit Knowledge Systems Inc. also tracks patterns and recurring concepts to monitor expertise within an organization, but it focuses primarily on outbound e-mail. Tacit's technology allows its users to maintain both public and private profiles and to control the number and frequency of the requests for information they receive and respond to, said David Gilmour, president and CEO of the 3-year-old company. "It's a continuous, almost magical way of tracking what everybody's focused on."
Wooing younger workers into government to replace the aging federal workforce also involves making information itself more accessible, the experts say. Marasco Newton Group Ltd., Development InfoStructure and SSB Technologies address those issues by, among other things, helping federal agencies develop telecommuting systems and opening up federal Web sites to citizens with disabilities.
Marasco Newton — whose chief knowledge officer is Abby Pirnie, former assistant commissioner for strategic planning and business development at the Federal Technology Service — consults on workflow automation, information architecture and data integration, and e-government. The 11-year-old company also is under contract to GSA to break down agency barriers to effective telecommuting, senior vice president and co-founder Jim Whittaker said.
The firm — which counts DOT, State, the Pension Benefit Guarantee Corp. and the Peace Corps among its customers — won an award last year from the Commerce Department for its innovative solutions to government IT problems. Telecommuting, or telework, has become a hot issue because "the technical talent the government needs is largely being lured into the private sector," Sprint's Murray said. Rep. Frank Wolf (R-Va.) introduced a bill in March that would provide a $500 tax credit to individuals who work from home via computer, and even the CIO Council has considered telecommuting as a potential solution to the problem of the aging federal workforce, she added.
Development InfoStructure is also riding the cutting edge of both technology and public policy by using open-source tools and Extensible Markup Language (XML) to build Disability Direct, a Web portal and online resource, for Labor. Open-source software is openly distributed, with users having access to the source code and the licensing agreement, if there is one. This allows free distribution of the initial software and the opportunity for users to modify and redistribute that software. The XML format provides a standard way to mark up Web documents so they can be read or exchanged on many devices.
DisabilityDirect.gov — scheduled to be introduced this fall — will give workers with disabilities and their employers access to reams of information on topics such as Section 508 standards; federal programs for Americans with disabilities; local community activities; learning aids and services; supportive technologies; and employment opportunities. Using open-source code will make it easy to change the site and the information it offers as software makers release updated versions of their products, said Peter Gallagher, Development InfoStructure's president.
The 15-person firm — which was founded in 1992 and has customers at State, Commerce and Labor — has also gained attention for its use of XML, which offers the promise of seamless online transactions. The CIO Council launched an xml.gov portal early this year, and several federal agencies have begun their own XML projects. "There's a real revolution out there that's starting to happen between XML and open source," Gallagher said. "As the federal government becomes more aware of open-source capabilities, my personal opinion is that will inevitably put pressure on proprietary vendors to lower their prices."
Browning is a freelance technology writer in the Washington, D.C., area.