The info-tech A-team
(Scotsman; 05/27/98)

  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 
simple.

   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 
airline ticket.

   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 
yesterday.

   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 
ever formed."

   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 
BT.

   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 
strong.

   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."

(Copyright 1998)