Loudcloud's UK e-gov't contract 'challenging'

Loudcloud, the IT infrastructure services company founded by the Netscape browser inventor, Marc Andreessen, on Thursday announced it had won the outsourcing contract for the U.K. government's Web-based services portal, ukonline.gov.uk. But now the real challenges will begin.

The U.K. government has promised that by 2005, all of its services will be running online, saving taxpayers 3.7 billion pounds (US$5.3 billion) in the process. But according to analysts, the massive project is failing and will not meet its deadline.

"Right now, ukonline.gov.uk only works like a giant search engine, and that is really the least of the government's problems when it comes to this project. They really are not putting enough effort into the spaghetti in the back end," said International Data Corp. (IDC) analyst James Weir.

"Though we don't know the numbers, this has got to be a pretty big deal for Loudcloud but they've got their work cut out for them," Weir said.

Loudcloud has been hired to provide site architecture, select the hardware and software to be used and to service and manage collocation and network connectivity, according to a spokeswoman for the office of the e-Envoy, the cabinet office responsible for spearheading the U.K. government's online efforts.

"The ukonline.gov.uk. is one of the most important sites in the government and the bid presented by Loudcloud won because it was the best in terms of value for money and innovation. We terminated our contract with BT (British Telecommunications PLC) over a month ago. Of course, we can't give the details of why the contract was cancelled, but we were in ongoing negotiations that were terminated in September," she said.

Both Loudcloud and the office of the e-Envoy declined to disclose any financial details of the agreement.

Loudcloud, which already has an SLA (Service Level Agreement) with the Post Office in the U.K., has also been hired to add bandwidth and services as ukonline.gov.uk grows and plans to use its Opsware automation technology upon which to build its services, said Ian Ordish, Loudcloud's vice president of customer operations EMEA and location executive.

In "Version 2" ukonline.gov.uk, as it is being billed, Loudcloud will be responsible for building and managing a site that will enable U.K. users to do everything from completing tax returns online to the getting the latest government information on current issues, Ordish said.

"From Loudcloud's perspective, we will be responsible for everything from core network routers all the way to data server tiers. We know what hardware and software we plan to use, though as a general rule, we don't make that public. In terms of the site itself, we are not responsible for the applications and in that sense aren't making changes," Ordish said.

"We are delighted to be working with the U.K. Government and the office of the e-Envoy on what we consider a highly exciting and challenging initiative," Ben Horowitz, Loudcloud's chief executive office and president, is quoted as saying in the company's statement. "Challenging" may prove to be the correct term.

In February, Forrester Research Inc. lambasted the U.K.'s electronic-government efforts in a study that found that only 13 percent of the vendors working with government were confident that the government could reach its goal of getting all services online by 2005. According to the study, the biggest problem with the project was that those involved with the online projects have a lack of IT knowledge.It is a problem that still exists inside the government, said IDC's Weir, who working on his own study of the U.K.'s e-government initiative.

"They still haven't gotten their heads around the idea of the Internet and how it works, basic things like IP (Internet protocol) standards. The issue of data transfer from legacy systems to new systems remains a massive issue. There have been years and years of institutional chaos with different systems being bought from different providers by different government departments. Local authorities are still making their own IT decisions," Weir said.

In September of last year, Prime Minister Tony Blair pledged 1 billion pounds for its online efforts and has continually assured the public that it will be able to meet its self-imposed 2005 deadline.

"It's not going to happen. The deadline for local governments to turn in their blueprints for online services was only last July. That's just not enough time," Weir said.

"I can't speak to what has come before us or what the government may or may not understand in terms of technical issues. We've very confident that the project that Loudcloud is responsible for will be ready next year and have already been working with the government. I can say that we aren't responsible for making various parts of the government's system work with each other, we're just working on the portal," Ordish said.

For its part, the office of the e-Envoy declined to comment on the specific technical elements of its contract with Loudcloud. "Version 2 of the site doesn't launch until next year and until then we are not interested in making a big push in promoting it. So therefore, any requests to talk about IT specifics will be declined," the e-Envoy spokeswoman said.

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