InformationWeek

June 21, 1999

IT Confidential
By Jack Soat

Serious troubles could torpedo the seven-year, $1 billion outsourcing contract that the state of Connecticut awarded to EDS earlier this year after competitive bidding had eliminated IBM and Computer Sciences Corp. The contract negotiations were originally expected to conclude on May 1, then on June 15, but no contract signing ceremony took place last week. Instead, the state's department of IT says negotiations may not finish for another week or more "because significant issues remain and it became obvious additional time would be required," according to a spokeswoman. She declines to elaborate but some of the extended talks may have to do with the new $1.5 billion figure for the contract. Another factor: objections to the contract last week by state comptroller Nancy Wyman and a protest by CSC. "There are too many questions still unanswered, and a growing body of evidence suggests that privatizing our information technology through EDS could be the worst fiscal and policy decision of the decade for the state of Connecticut," Wyman said in a statement. She referred to preliminary findings of an audit of the Medicaid processing work that EDS performs for the state's Department of Social Services. One glaring red flag: EDS was supposed to have completed in 1994 an Advanced Information Management system for processing Medicaid claims; the system was never completed. CSC's protest involves its original proposal for a public- private partnership that would let the state's 600 IT workers continue as public employees and members of the Connecticut State Employees Association. CSC says a similar plan put forward by the state in its negoti-ations with EDS was "unfair." A CSEA spokesman says the state proposal to let the workers remain public employees does not go as far as CSC's and has been rejected.

Sun Microsystems will decide over the next 90 days what parts of its internal IT organization to outsource, according to Masood Jabbar, president of the computer systems unit at Sun. "I just finished implementing what is probably the world's largest ERP [system]," Jabbar says, "and I wouldn't want to do it again. I would much rather have someone else do it for me, so I can focus on our core competencies."

Chase Manhattan Bank has "dot.commed," creating an organization named Chase.com and giving it responsibility for coordinating all of the bank's Internet-related activities. The new group comes as the bank prepares to launch a new Web site (www.chase.com), which has a common look-and-feel and a much more powerful infrastructure. Chase's current Web site was built in 1996, says Michael Mazza, technical director of the Internet project office at Chase, and its design and horsepower are inadequate for what Chase plans to do on the Web. Chase spent $2 million on servers from Sun, from high-end models E5500 and E4500 for LDAP directories, content management, and databases, to E250 and E2 servers for jobs such as authentication. One goal: 99.99% availability, with the capability to support at least 1,000 users hitting "enter" on the same application at the same time, says Mazza.

Out of the mouth of babes ... at the JavaOne Conference last week in San Francisco, a neophyte reporter, who was covering the event for the Ottawa Sun newspaper, was heard complaining that the affair lacked hard news and consisted mostly of press releases and marketing brochures. Griped the cub reporter: "I can't seem to find any real substance here."

Maybe he's not cut out for technology journalism. He doesn't know the three rules of attending conferences: first the free food, then the gossip, then you file your stories. Get your priorities straight and file me an industry tidbit, at jsoat@cmp.com or phone 516-562-5326 or fax 516-562-5036.