washingtontechnology.com/articles/2009/03/02/s-and-l-to -
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Published on: 2/26/2009
Last Visited: 3/11/2009
“IBM’s outsourcing wins have clearly created new revenue streams for them and have reasserted their footprint in the state and local market overall,†said Rishi Sood, vice president of government industry market strategies at Gartner.
However, IBM hit a rough patch with its Texas outsourcing project in November when the state’s Department of Information Resources (DIR) issued a notice-to-cure, in which it gave the company a short amount of time to correct deficiencies in performance related to data backup.
Before the month was over, though, Texas DIR announced that IBM was making noticeable progress on a plan to correct the situation.
EDS also has made substantial gains in the market, Sood said.
The company continues to capitalize on its 2007 acquisition of Saber Corp., which gave the company a broader portfolio and allowed it to go head-to-head with other tier one integrators for tax and human services modernizations, he said.
EDS landed a $42.8 million project in June 2008 to modernize Ohio’s tax and revenue system by consolidating nearly two-dozen types of tax collections into a single system.
“EDS appears to be building out its state and local business more aggressively than in years past,†Sood said, acknowledging the company’s ability to continue to win large Medicaid-related contracts and push into other market segments such as finance and administration and human services. “These represent a dramatic step forward for the company,†he added.
Federal aid to states
The $787 billion economic stimulus bill signed into law Feb. 17 by President Barack Obama provides tens of billions of dollars for highway construction, health IT, mass transit and water infrastructure modernization, according to the Congressional Budget Office.
Although many of those areas are not traditionally associated with IT spending, any large-scale physical infrastructure modernization that would take place as a result of the stimulus is likely to have a technology component attached to it, Sood said.