Integrator Rides The Government Wave

Since then, the number of employees has grown from just 10 to nearly 300 now, with about three-quarters of them supporting the services side. And while much of the growth is coming from services (accounting for 100 percent in sales increases last year), product sales are rising at a more-than-respectable rate as well (30 percent in 2002).

Specializing in e-government, the privately held PlanetGov supplies, designs, builds and manages IT solutions for federal customers, drawing on the resources of more than 50 vendors, including Cisco, Dell and Microsoft. The company, in its first incarnation as IntelliSys Technology Corp. (ITC), was founded in 1983 as a provider of network-support services to government agencies. In February 1998, president and CEO Steven W. Baldwin,along with executive colleagues Paul Collins, Steven Schlosser, Scott Reynolds and Brian Nightingale,acquired ITC and repositioned it as PlanetGov, aiming for the new venture to emerge as a top government VAR/systems integrator. Today, it's safe to say that it has made its mark, having emerged as one of the top players in the federal marketplace. The Washington Business Journal Fast Track 2000 named PlanetGov as the second-fastest-growing company in the greater Washington, D.C., area, and the same year, Inc. Magazine named it the 45th fastest-growing company in the nation. Top customers include the Department of the Treasury, U.S. Customs Service, Department of Defense (DOD), Securities and Exchange Commission, Department of Agriculture, Department of Justice and Department of Veterans Affairs (VA).

Baldwin has been with PlanetGov/ITC since 1998. Previously, he served as senior vice president of business development and sales with then Fairfax, Va.-based BTG, a systems integrator, from 1995 to 1998. In a recent conversation with VARBusiness, he discusses why it's critical to PlanetGov's business model to supply not only the best IT goods to federal customers, but, also, the needed talent to service the customers who buy those goods.

VB: Why has PlanetGov invested so much in the services end?

Baldwin: We want to do as much as we possibly can for our clients. That's the guiding focus of our business model. We want to provide the right products, but we want to provide the very best IT services behind those products as well. This is a component of all of our contracts,with the VA, the IRS, the DOD,with all of our federal customers. This is a unique model when compared with other companies that are operating within this space. Many of them are pure-play,services-only or product-only. For us to best serve our customer base, we prefer to do both. From a financial standpoint, our business model is more profitable than a pure-play [one]. From a customer standpoint, it brings them more value as a single source to satisfy all of their needs.

Take the DOD, for example. We're providing the network infrastructure on a contract redesign for all of the networks in military hospitals [that's] going to provide the network capacity for the support of new clinical applications. We're not just providing the infrastructure, but also the network-engineering component of the design, as well as the installation services.

VB: So we take it that providing a presence every step of the way reaps rewards, ROI speaking, lending itself toward a familiarity-breeds-confidence sort of thinking?

Baldwin: Yes. The DOD contract exemplifies the bigger picture of what we're doing. I look at this kind of process in three steps: the planning and design phase,we design the networks, do the capacity planning, do the testing; then the deployment,we implement those designs, install the networks and build them; and then we put the personnel in there to provide network-management services to the customer. Without the third part, we'd simply lose that opportunity to better serve our customers.

All of this gives the government customer a partner that truly brings domain expertise to the table for them. They don't have to invest the time and effort to educate multiple contractors in these different areas. They pick us as a partner and hand off the entire program to PlanetGov.

VB: What are the key IT niches that are sparking the growth in services?

Baldwin: The government is constantly looking to outsource everywhere, with far more opportunity in that space than before. From operational support to what I'll call complex integration: Voice-over-IP (VoIP), network engineering, software design and development, and management consulting. It's

really across the board. With VoIP, for example, the driving force here is dollars. There is tremendous ROI in implementing converged networks. When agencies look to upgrade a network, they're seriously looking at converging everything, including voice, data and video. The convergence factor allows you to have both voice and data on the same network. It saves government customers a tremendous amount of money in operational costs. And they're doing this more and more as they upgrade networks or when they move into new buildings.

A physical move has become a great opportunity for VARs and systems integrators to implement converged networks for clients.

VB: And that aspect of business is reflected in what's starting out as a small deal with the Food and Drug Administration, but could really take off, right? Tell us about that, and how it serves not only the government customer, but your vendors.

Baldwin: What vendors want is a partner that can produce incremental business for them. We do that,rather than being looked upon solely as a [VAR] that's strictly doing transactional fulfillment. They look for partners that help them grow their businesses. With the Food and Drug Administration [FDA], we're implementing a converged network right now. It's a small one. In fact, it's only being used as a pilot program,a proof of concept. But they want to see what they could do when they move into new facilities. In this case, our primary vendor is Cisco.

This business is truly incremental business that we generated for them. It was not an opportunity generated by their sales force. We generated it through our business development people. We demonstrated our capabilities to the FDA and brought Cisco into the deal. We didn't even have to tell Cisco what we were lining up until the deal was set. We just went out and sold it. Vendors like that. They know we have the ability to sell their products and that we have a proven track record. We can pursue the business using our own resources. This FDA contract could result,if it really takes off,in up to $30 million in sales for Cisco, even though now it's just a $1 million pilot program.

VB: You received Cisco Silver Certification status a year ago and are closing in on Gold Certification. Can you effectively measure whether that has an increased impact

on sales?

Baldwin: Not in a sense of dollars, but the intangible benefits are considerable. PlanetGov is one of only a handful of companies our size that has that kind of certification. It's a credential thing for us. It demonstrates our commitment to the platform. The customer views it as something that engineers train for and achieve. That brings credibility to the table when we go to market.

VB: Shortly after Sept. 11, you were named as a subcontractor to EDS on the Air Force Information Technology Services Blanket Purchase Agreement, which could be worth up to $650 million over a multiyear period. How are customers' needs shifting on the defense side, especially as global conflict looms?

Baldwin: Clearly, the focus on security has risen exponentially. But the other really interesting thing you're seeing is the wireless opportunity. The mobile workforce is huge across the board in government, especially the military. It's a theme the government is constantly stressing. From the people in the battlefields to the doctors in the hospitals to the call-center operations, they're looking for more and more effective tools. They want to use PDAs, especially in areas of stress and quick-moving operations. Doctors want to use PDAs to record and download patient information. This brings up the entirely different, but related, issue of security, which we also address for our customers.

It's not all about the DOD, though. This demand has hit home with the civilian agencies, too. The IRS has a very mobile workforce conducting audits. They go where the audits need to be done, not the other way around. Whether it's a home or a business, the IRS auditors have to go wherever the work is, which means the IRS is more interested in wireless applications. This means that we go out where the work is as well. If there's a break-system call out in the field, we'll go there. That's the part of the services commitment we provide to our government customers.

VB: Speaking of wireless, your company just won a huge opportunity there; it was selected by the Department of Veterans Affairs to secure wireless networks and applications to supply AirFortress products from Fortress Technologies, as well as provide installation and training services to more than 167 VA sites nationwide and abroad. How did this come about, and how big can it get? What role does wireless play for the VA?

Baldwin: The VA is on the cutting edge in reviewing and implementing some of the latest technologies. This win is a great topic because it ties together several subjects discussed here,PlanetGov's approach to program management and professional services, strong partnerships, our focus on providing total solutions for customers and an IT solution that solves a large and complex business problem most federal agencies face. In trying to execute its mission, the VA has encountered numerous security problems while developing its IT infrastructure over the years. Veterans Affairs continues to have a tremendous focus on security. It has moved swiftly to correct past vulnerabilities, and [to address] the concerns of Congress and public at large.

There is a tremendous mobile workforce at the VA, including doctors, nurses, on-site IT staff, etc. The VA has numerous applications that run, or could run, across wireless networks. The same is true at most federal agencies.

The solution we developed with Fortress Technologies and our subcontractor, Federated IT, encompassed providing hardware, software, planning, design, installation and training. Among applications to be addressed, the Veterans Health Administration wanted to secure its Bar Code Medication Administration application. The VA is at the forefront when it comes to ensuring [that it] locks down and secures the integrity and privacy of medical and other confidential information for constituents the agency serves. We definitely plan to leverage this solution with other customers.

VB: On the home front, you're working with Computer Sciences Corp. to provide, among other services and products, knowledge-management tools for the Defense Acquisition University at Fort Belvoir, Va. The deal could be worth $47 million. How far along does the government want to get when it comes to knowledge management?

Baldwin: They're extremely interested in it. They want to get out of the reactive mode and get proactive when it comes to managing the infrastructure. It enables the agency to manage its assets better.

It works that way in the civilian agencies, too. For example, we're working with the IRS as they seek to improve their operations by taking a more enterprising view of their architecture. They've improved the process to the point where they refurbish their workstations every three years. They roll out the new applications instead of being completely reactive when something goes wrong.

VB: What's the best way VARs can take advantage of the opportunity they have with a vendor and to use the relationship to create future, added business?

Baldwin: Vendors across the board are looking [for] a very limited,but very needed,set of trusted partners. They do their business, especially with the federal customer, over long periods of time. So you have to understand the environment in which they work. You have to demonstrate, over time, that you can bring to the table a domain expertise,that you represent their products with the kind of value-added services to the government customer that supports the customers' missions. The more domain expertise we develop, the more value we present to the customer.