Daniel R. Young: veteran fed reseller

Federal Data initially resold IBM Corp.
products and provided services for mainframes and RISC systems at data centers. More
recently, Young's company has begun supporting users of Microsoft Windows NT 4.0 in
addition to Unix.

GCN associate editor Bill Murray interviewed Young at his Bethesda office.

GCN: How has IBM Corp. changed over the years?

YOUNG: We were very close to IBM for 15 years, and we were its largest teaming partner
in the federal market. We also brought in non-IBM products and added functionality to
operating systems and software for mainframes.

It’s a different company now, so we’re not as close as we used to be. We do
not handle PCs much, but we are a principal supplier of RISC products, and we do team with
IBM from time to time.

The marketplace has gone from a central glass house to desktops throughout the
enterprise. We reorganized three years ago to focus on four business areas.

Systems integration, the core business we had with IBM, takes commercial products, adds
software and functionality, and brings them together with networking, servers, hubs,
routers, help desks and all the things that go with enterprise information technology.

We also provide engineering and technology services to the health sector and aerospace
agencies. A third area is Unix and high-end servers, workstations and networks running
Microsoft Windows NT. A fourth area provides consulting, training and specific solutions.
We’re a Microsoft-certified solutions provider.

GCN: How healthy is the federal demand for Unix
products?

YOUNG: The aerospace side and the scientific field are strong, such as the National
Institutes of Health. Other agencies are either MVS or NT. Unix is alive and well,
it’s just in certain segments.

GCN: Is Windows NT stable and scalable enough to
meet the needs of users who once relied exclusively on Unix?

YOUNG: I think it’s stable enough and getting better. If an application just
cannot go down under any circumstances, NT probably is not the way. If you have a
nationwide network, but it’s not life or death, NT can work well.

We just rolled out Microsoft Exchange, which is complex itself, running under NT to
15,000 employees in the Veterans Benefits Administration. I haven’t seen NT crash. We
worry about it more than we should.

GCN: I’ve heard that at one point you knew
all the federal data center directors personally. Are you still doing a lot of work in
government data centers?

YOUNG: Well, certainly I know them. My business is to know our customers. We do a lot
of work for the data centers that remain. We’re seeing more and more services for
fees, and they’re doing that well.

We work with the VA Finance Center in Austin, Texas, which is still a good customer. We
lost a couple of Social Security Administration contracts recently, one for the data
center in Baltimore and the [Intelligent Workstation/LAN] contract that Unisys Corp. won.

I have felt for some time that some, but not all, of the data centers are going to
become data repositories or warehouses. We’re doing quite a bit of work in that area.

GCN: What do you think about IWS/LAN’s use of
100-MHz PCs?

YOUNG: I was a bidder on that contract with IBM and AT&T Corp., and Unisys bid very
aggressively—well below our bid. I believe Unisys should live with the prices. If
they don’t make 100-MHz machines any longer, I’d say, “No problem, just
deliver 200-MHz machines for the same price structure.”

When SSA [drafts a contract], they say, “This is what we want.” You can bet
they mean it. I’ve learned that through hard, hard lessons. I essentially shut up,
delivered and took my lesson. I believe anyone who does business with SSA should be
prepared to do the same.

GCN: What’s your take on the seat management
and PC outsourcing contracts the General Services Administration and NASA are working on?

YOUNG: The advantages are pretty obvious. Outsourcing will be less costly and will
provide better and more reliable service for agencies.

A less obvious but probably more important aspect: It is going to release federal
personnel, who are in short supply, from supporting desktop PCs or LANs to doing the
mission-critical work they were hired to do.

The Navy hired engineers to develop maritime warfare systems. What are they doing?
Maintaining desktop PCs. The Navy needs to retrain and refocus people to do the mission,
which is not to put a PC in front of everyone. That should be looked upon as a utility,
like a telephone.

I think federal agencies will discover this. It’s not going to happen overnight.
But ultimately, if pressure on head count and budget continues, there will be a natural
embrace of desktop management.

GCN: Will agencies be able to retain the authority
to choose products from certain vendors under seat management, or will contractors make
the decisions?

YOUNG: Most agencies have preferences. We’re not going to argue that. What is good
about one or the other brand is that it has reliable service and desirable features.

Who cares what the label is, as long as it provides what the customer wants? We have
experience with almost every brand. We’ve teamed with Compaq Computer Corp. [on the
GSA Seat Management bid], but if a customer doesn’t like the feel of the Compaq
keyboard or something, we could roll in an IBM or a Dell Computer Corp. PC.

GCN: What’s your view on the state of
procurement reform?

YOUNG: Some agencies are way out ahead; some are dragging behind. I wouldn’t say
they’ve gone too far. They’re trying to find the edge of the envelope. Some
decide, “I don’t want to go there,’’ and some go farther.

We undertook rigorous business planning in 1994. We wanted a vision for what the
federal information market would look like in 2000. Our vision was substantially different
from 1994, when agencies had to develop a grand plan and took years to get a procurement
out.

There were a lot of protests. Technology was obsolete by the time a contract was
awarded. The procurement process appeared broken. We thought sometime in the next six
years, Congress would rise up and change the way things were done.

We missed it by about four years. In 1996 and 1997, a confluence of a Republican House
and Senate and a Democratic administration came to the same conclusion: The system was
broken and needed dramatic change.

Fortunately, we had changed our business plan, but many vendors hadn’t and
weren’t in a good position.

What’s more

GCN: Are agencies systematic and fair in tracking
vendors’ past performance?

YOUNG: Past performance is hard to quantify. There are tough questions, such as how to
measure a company when one division did a good job, while another did not. The standards
in use are very elementary.

Having said that, it’s the right thing to do. A customer shouldn’t be
required to award a contract to a company it thinks didn’t do a good job.

You know good and bad performance when you see it. Good faith and good sense ought to
be the standards for past performance. That’s the way the commercial market works.

I’m a rookie again. I spent 25 years under the previous system, and [new
regulations have made] a level playing field. It’s a very exciting time.

GCN: Are you going to focus on providing services,
or can agencies still look to you for products?

YOUNG: I’d like to see 60 percent of our business providing services and 40
percent providing products. Right now, it’s probably about 55 percent services and 45
percent products.

I always want a high product content, because I can control how well the
customer’s system is performing.

People by and large don’t buy routers and plug them in themselves. There’s
LAN design, WAN configurations, features and support that we provide as part of our
product sales.