The info-tech A-team
ANYONE who has ever tried to deal with the labyrinthine Department of Social
Security will be only too aware why ICL and Microsoft are teaming up to try and
make the process simpler.
Their alliance announced yesterday highlights the existence of a huge market
for computer systems and software aimed at making life easier for the public in
virtually all walks of life, from schools to shops to the workplace.
The keys are giving easy access to information and making transactions
This market will only increase as the Internet in particular makes it
possible for almost every man and his dog to get on-line and link up with any
organisation running a website, whether it is to sign on the dole or book an
The IT market generally is thought to be worth about GBP 700 billion
globally and, within this, the more specific markets ICL is aiming at are
thought to be substantial.
Microsoft and ICL were painting it yesterday as a partnership designed to
"simplify the way people live, work, learn and shop".
But it is clear that the financial rewards for any company or grouping which
manages to get a stranglehold on the kind of large organisations the two
companies are talking about will be substantial.
ICL's chief executive, Keith Todd, yesterday put a GBP 500 million target on
the size of business the alliance is hoping to pull in during the next three
years and one suspects he would not have publicly set a target unless it was
conservative and achievable.
The idea is to be a clear market leader in a field that includes competitors
such as IBM, Bull, BT and Sema.
Overall, tens of millions of dollars of investment will go into developing
new systems, training existing staff and recruiting about 1,000 new systems
engineers and software developers.
Of this, Microsoft will be contributing a substantial share, though the two
partners declined to reveal the exact terms of their commercial relationship
One thing is certain, speculation will now be intense, in the run- up to
ICL's planned flotation in the year 2000, that Microsoft could take a
significant stake, despite it declaring yesterday it was not looking for
acquisitions in Europe, only partnerships.
The alliance is trying to focus tightly on four specific sub- markets:
lRetail, particularly organisations such as supermarket chains which need to
have close contact with customers.
lGovernment, both local and central, especially those departments dealing
regularly with the public, such as the Department of Social Security.
lEducation, as schools, colleges and universities increasingly use remote
sources accessed electronically as teaching aids.
lEnterprise, especially where businesses need to improve the effectiveness
of their computer systems and communications.
Microsoft's executive vice-president in charge of sales and support, Steve
Ballmer, said yesterday: "The problem is that computer systems are generally
too non-navigable for the customer. It is possible for all governments, for
example, to have better IT systems.
"Much of what governments do is perfect for electronic information and for
electronic reporting of information.
"This alliance with ICL is the biggest single enterprise alliance we have
The deal represents the latest stage in the remodelling of ICL from a
supplier of computer hardware to a software services company by Keith Todd, who
took over as chief executive from Sir Peter Bonfield, now chief executive at
ICL now operates in over 70 countries, has 19,000 staff and in 1997 made a
profit of GBP 30 million on turnover of GBP 2.4 billion.
It is trying to cash in on the rapidly increasing links between computer
technology and telecoms technology - with the former being linked by the latter
into networks that are increasingly global, fuelled by the Internet.
Todd describes this as a revolution "as profound as the Berlin Wall coming
down or the extinction of the dinosaurs".
One of the areas which the new alliance is likely to target particularly
hard is the retail sector, where both ICL and Microsoft are already very
Here, customers like Marks & Spencer are already using Microsoft- based
systems which cover everything from point-of-sale till systems to investory
information to enable retailers to service customers quickly from all outlets
including kiosks and over the Internet.
In addition, it records valuable information on customer preferences and
shopping habits and ICL has developed a system which enables a retailer to
build up an exact understanding of an individual customer's preferences so that
tailored special offers can be targeted to cater for them.
ICL said: "These offerings give retailers the ability to know precisely who
their best customers are and to build lasting relationships with those who are
the most profitable."
In the field of government, ICL is already working on supplying systems to
simplify how people interact with local and central authorities and receive
state services and benefits. Projects include video-conferencing systems which
allow the public locally to access council, local police and education services
without visiting central offices.
But now ICL will work jointly with Microsoft to design and develop a
publicly accessible computing system called CafeExpress, run on a Microsoft
software platform, to provide citizens with a single point of access to
information on all government programmes, offerings and entitlements,
accessible both through PCs in people's homes or via public access kiosks.
Todd said: "This landmark alliance will redefine how consumer- centric
companies and governments interact with the citizen and, by basing systems on
industry standard software, we expect to drive down the cost of computing and
offer customers wider options and benefits."