IBM chosen as preferred supplier for GSN, despite politicians' long memory

A New Zealand State Services Commission decision to chose IBM as its preferred supplier of network management and service delivery for the Government Shared Network (GSN) was greeted internally at Big Blue almost joyously.

It signifed the company was back in the government's good books after some years of being on the outer as far as major contracts were concerned, in the wake of the 1999 abandonment of the Police Incis project after cost over-runs of NZ$40 (AU$36.85) million.

But, politicians, it seems, have long memories. Some are now in ministerial positions - they were in Opposition at the time of Incis - and are reportedly unhappy at IBM's GSN success.

Three "strong contenders" were short-listed for the network management and service delivery components of GSN, according to the SSC's ICT deputy commissioner Laurence Millar, who said: "IBM came through as the best of a good bunch".

The other two were the obvious suspects: TelstraClear and Telecom, although Telecom is said to have belatedly withdrawn from the bid. It will benefit anyway from GSN.

Millar is saying little else. In fact, IBM has been gagged from commenting further. No one is saying what the contract is worth, although there are industry estimates that the sub-contractural components may be worth around NZ$50 million over the next three to five years.

The tender was split into 18 sub-projects. The successful bidders included Asnet, Kaon Technologies, Datacom, BCL, CityLink, Vector Communications, FX Networks, DTS and Revera - subject to finalisation of contracts.

All this spells a very complicated supplier structure that will test the limits of vendor cooperation. The SSC has taken a calculated risk that supplier diversity will provide the best technologies in a contestable way, balanced against the scope for miscommunication and acrimony, where vendors may find cooperation not in their best interests. Then there is the problem if someone screws up.

IBM managing director Katrina Troughton wouldn't comment about the company being seemingly back in government favour, rather pointing to a "healthy refocusing" on the public sector as one of IBM's three growth planks in New Zealand, (the others are focusing on key commercial clients and on business partners).

She rightly points to the acquisition two years ago of Logical CSI as an important component of success on a number of fronts. "It's given us scale and brought us strong domain knowledge and expertise," she says. "We can now offer a far stronger value proposition."

The Logical acquisition has been instrumental in driving successful business at Canterbury Health; a voice over IP project at AUT; an RFID proof of concept at the Warehouse and developing a post-Incis relationship at the Police.

"There's been a significant cross-over," Troughton says. "At a country level there is now a growing awareness of the critical nature of networks as key infrastructure."

Use of the government shared network will not be mandatory, but government departments will be required to formally evaluate it when their current network supply contracts are up for renegotiation. Other agencies connected with government may also be invited to participate.

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