Systems builders are gradually winning over government skeptics to white-box solutions
When government agency buyers head to the office cafeteria, they typically make a choice--turkey sandwich or Cobb salad? Chips on the side or carrot sticks? These kinds of options have always existed at lunch. So why not apply the same thinking to federal IT purchases?
That's exactly what's happening with the growing adoption of what the IT world calls "white-box" solutions, albeit at a very gradual pace, many VARs say. The white-box solution brings an "a la carte" mentality to the IT purchasing table. They're solutions that are customized to the individual needs of the buyer, picking and choosing the various parts in personalized, nonhomogenous fashion. Thanks to white-box solutions, many VARs and vendors are finding new sales opportunities within the federal government marketplace: Thousands of Social Security Administration employees are getting new smart cards that allow entry and access to multiple agencies. Air Force employees are becoming better equipped to hunt down needed parts for fighter jets. And patent workers are aiming at getting a better command over all of the data they sift through.
A cultural shift needs to take place before any major adoption of custom systems by federal agencies. But once misconceptions are addressed, VARs and vendors are finding that the potential for spillover, word-of-mouth sales is strong.
"You need to dispel the notion that proprietary systems sold by first-tier vendors are somehow superior to white-box systems from lesser-known vendors," says David Valencia, vice president of sales and marketing at Pogo Linux, a Seattle-based storage solution provider. "Most [federal customers] think our systems will not integrate with their first-tier, homogeneous solutions, or that we won't support them as well. But our business depends upon our being able to interoperate. It would be irresponsible for us not to take them into account. We created a white-box storage solution for a federal customer who raved internally. The result was a slow but steady stream of orders from others in the same department."
There's no known research that pinpoints sales growth of white-box systems within the federal government marketplace, and the mindset of standardization amid agency cubicles is tough to crack. But pricing matters, and this is one key advantage that VARs are finding when it comes to convincing an agency to consider a white-box solution purchase--generally, they can save 10 to 15 percent on the total cost. In the end, it's often the smaller, nimbler government customer that's eager to authorize a white-box purchase.
"[Here's] the bottom line: When an agency needs to replace dozens of PCs at a time, they tend to lean toward the well-known brand names," says Shawn McCarthy, director of research over government vendor programs at Government Insights, a Falls Church, Va.-based research company formed by IDC. "But when individual departments need to buy just a couple of PCs at a time, and if money is tight, they go shopping for the white-box solutions, and there are several of them available on the GSA Schedule."
The same holds true at the server level, he says. While agencies tend to standardize on well-known brands in the larger data centers housing multiple systems that support infrastructure, they consider custom systems with a more attractive price point for individual, department-level servers.
Beyond price, a drive for "best-of-breed" products at many federal agencies often leads to white-box purchases, as government customers seek offerings that easily integrate with third-party products to provide a complete package. This has been going on since the 1990s, when the Clinger-Cohen Act of 1996 pushed for more commercial-style practices in government procurement.
"Prior to this trend, government off-the-shelf solutions were the order of the day," says Randall Jackson, director of federal sales for Mark Logic, a San Mateo, Calif.-based vendor specializing in XML content servers. "These solutions, however, were expensive to maintain over the life cycle of projects and kept many programs chained to legacy systems that were far behind the commercial world. The emergence of cheaper, faster hardware, along with standards for data access, storage and transfer, has accelerated the popularity of white-box systems. In addition, the sense of urgency in the intelligence, defense and homeland security communities, post 9/11, has increased the need to build new, more agile systems faster."
NEXT: Thinking out of the (white) box.
With the increased profile of federal enterprise architecture and service-oriented architecture at the integration level, agencies have been able to avoid what's called "vendor lock" and proprietary solutions. The government buying community itself has gotten smarter, Jackson says. The federal enterprise architectures supported by many government agencies have caused organizations to view systems as a series of components, making it impossible for any one vendor to provide a turnkey solution.
While there are certain policy-driven and risk-aversion factors that discourage consideration of white-box solutions at the agency level, CSC, a Falls Church, Va.-based solution provider, is seeing acceptance and exploration of the concept. Agencies increasingly procure services and focus less on the technologies that enable the delivery of services, says Yogesh Khanna, vice president and CTO of IT infrastructure solutions for the public-sector division of CSC. At the same time, systems integrators establish system-level architectures that can be decoupled easily to allow for trade-off analysis, allowing the customer to select or swap out components of a particular solution over the life of a contract.
"For CSC, this approach is very much a part of our best practices," Khanna says. "If a federal agency customer already has a policy management tool in its current security operations, we make every attempt to leverage and reuse that tool as a part of a larger integrated solution, helping protect the customer's investment. So while the white-box approach isn't common in the case of product solutions, the principles are often applied to build integrated system solutions for the federal government."
In another example, Baltimore-based solution provider Jacob & Sundstrom favors white-box deployment to support the delivery of smart cards to 85,000 employees and contractors with the Social Security Administration. A driving force behind this project is the Homeland Security Presidential Directive (HSPD) 12, which mandates that all federal agencies adopt a single ID standard for controlling physical and logical access by 2008. The resulting solution will integrate products from RSA and other vendors, so the cards can operate with multiple agency systems.
"Many of the problems we've faced stem from the fact that none of these products were designed to integrate with each other," says Matthew Neuman, director of business development at Jacob & Sundstrom. "Much of our effort was in working with companies to develop solutions for integrating them into the overall system. With standards being set [by government directives], software and hardware manufacturers realize they need to provide for integration efforts to meet federal customer requirements."
McLean, Va.-based Keane built the Enterprise Solution-Supply (ES-S) for the Air Force that acts as a backbone for operational logistics execution. The package incorporates Java application servers from Oracle and middleware from Microsoft, IBM, Mitem and Unisys. Now, if the Air Force needs a mission-critical repair part, Keane's solution will allow it to track one down across the globe more readily, in real-time. And the solution will allow applications to be added to the system more rapidly and cost-effectively.
"There's been a strong case for best-in-class multivendor solutions, but the difficulties of integration have favored a single-vendor model," says Tom Mowbray, enterprise architect at Keane. "White-box solutions can increase the functionality match between commercial off-the-shelf and government requirements. [They] also have more flexibility and extensibility. With many single-vendor solutions, the agency must wait for the vendor to implement new functions. With white-box [solutions], federal agencies can modernize or extend individual parts without replacing the whole suite."
These are all compelling arguments for custom systems--arguments that have not been ignored by federal watchdog organizations. Federal Acquisition Regulation11.105 states that agency procurements "shall not be written so as to require a particular brand name, product or feature of a product, peculiar to one manufacturer, thereby precluding consideration of a product manufactured by another company." Rather, agencies are to articulate a benchmark for performance.
That's good in theory, but the fact remains: A cultural change is needed before this alternative stands on a level playing field with proprietary systems. Solution providers need to get in early.
"White-box solutions can become a major player if the providers reach the tech-specific folks in government before the request for proposal goes out," says Mark Amtower, a federal government market consultant for solution providers and the founder/president of FederalDirect.com. "There are a number of appealing aspects of white-box solutions--[from] favorable pricing [to the] ability to use agency logos instead of manufacturer names."