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For the most part, I’m a technology skeptic. I’ve spent more than a decade advising businesses to steer clear of emerging technologies that lack successful track records.

I’ve been particularly wary of voice-over-IP (VoIP) networks. Sure,VoIP has lower acquisition costs than traditional telecom gear. But is it truly ready for prime time? Compass Health certainly believes so. The Everett, Wash.-based nonprofit organization recently embraced a VoIP network designed by Avnet Enterprise Solutions. Compass Health expects the new VoIP network to slash its monthly telecom costs by 70 percent and deliver a positive return on investment in 16 months.

Avnet insiders say the VoIP solution includes Cisco Systems Inc. switches, routers, IP phones and Call Manager software. During a 1999 interview, Cisco CEO John Chambers assured me that his company would standardize on VoIP phones with a year or so. Cisco missed that deadline, but has made up for lost time at Compass Health.

Deal 2 – CSC Stumbles

Deal 2 – CSC Stumbles

The Internal Revenue Service has sent a letter to Computer Sciences Corp. (CSC), informing the consulting firm that the IRS may circumvent CSC and recruit new contractors for a major IT upgrade project.

The letter is the latest setback for CSC, which has missed multiple deadlines in its quest to upgrade the IRS’s IT infrastructure. IRS Commissioner Mark Everson disclosed the letter during a House Ways and Means subcommittee last week, which was covered by the Dow Jones newswire service.

The subcommittee meeting also included an important lesson for customers: Everson conceded that poor oversight by the IRS was at least partly to blame for the project’s delays.

Next page: Deal 3—Special Financing

Deal 3—Special Financing

Move over, Alan Greenspan. Ingram Micro Inc. is taking a strong interest in the lending market. The distributor has introduced “extended flooring” and “bid-bonding” programs that help solution providers get easier access to the financing and insurance services required to win government contracts.

Under a new agreement with GE Commercial Distribution Finance, Ingram Micro’s GovEd Alliance solution providers now receive 60-day free flooring and finance options on all products purchased. In addition, Ingram Micro has increased its existing flooring finance program with Textron Financial Corp. from 45 days to 60 days.

Deal 4—Speaking of Sales

Deal 4—Speaking of Sales

DiamondCluster International Inc. is making the rounds on Wall Street. Executives from the consulting firm spoke at a Goldman Sachs technology forum last week, and will take the stage again on March 10 during Lehman Brothers’ global software conference in Half Moon Bay, Calif. DiamondCluster isn’t alone. Many publicly held solutions providers now tout their businesses at investor conferences—a clear indication that financial prospects continue to improve for many consulting firms.

About Contract Watch: Each week, this column examines customer engagements that are stirring the channel, and the solutions providers behind them. Our goal is to strip away the hype and tell you what’s really selling—and what isn’t—in today’s IT marketplace. Send your tips to my e-mail address below.

Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at