IBM Wins Contract To Consolidate Government Data Operations; A Risky Venture?

IBM has won the right to an $863 million, seven-year contract to consolidate nearly every “data center” of Texas state government (the comptroller’s office and Department of Public Safety Excluded).

Proponents of the contract claim it will result in beefed up security and money saved for the state.

IBM will reportedly hore 330 existing state employees from information technology divisions government wide, and give those employees 5-10% raises.

In all, 27 state agencies using 31 data centers managed by the Texas Department of Information Resources are covered by the contract—these range from the Texas Department of Criminal Justice to the Texas Workforce Commission.

The data centers will be consolidated into a building in San Angelo and one in Austin, which IBM is creating with Unisys, one of three other subcontractors in on the deal.
Other subcontractors are Pitney Bows and Xerox.

Many question whether or not this contract will result in the same debacle as the Accenture contract. The Texas State Employees Union thinks so, and asked the state last week to hold off on letting the contract.

Given the state’s budget, the savings is a mere drop in the bucket annually: $25 million, with total savings of $159 million overall for three years.

So, in terms of cash, the contract isn’t necessarily worth just a ton of savings to the state.

I guess the next step is to sit back and see if the systems crash.

Unlike Accenture, however, IBM, Xerox and Pitney Bowes do have better reputations for at least doing a decent job. So, it’s not as if the technology infrastructure of state government was handed over to the tech support guys at Best Buy.

However, it has been proven time and time again that provitization of any government service is risky business, even though it’s a favorite tactic of Republicans.

Only time will tell if this, too, is a risky venture.

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