It’s Miller Time

Although investors remain wary of channel stocks, anecdotal evidence suggests that business is picking up for solutions providers and major technology providers.

IT consulting firm Keane Inc., for one, says it has signed a three-year application outsourcing agreement with Miller Brewing Co., the world’s second largest beer company. Under terms of the agreement, Keane will manage, support and enhance more than 180 applications across Miller’s five core business groups: sales and marketing, corporate services, operations, SAP, and data warehousing. Financial terms of the deal were not disclosed.

Overall, business appears to be looking up at Keane. During its first quarter, Keane’s bookings doubled from a year ago to $409.7 million, according to Boston Business Journal, which closely tracks the local solutions provider. Keane President and CEO Brian Keane has been on his soapbox lately, promoting the company’s decision to open a 3,300-person, $25 million facility in India. Keane and other IT solutions providers have drawn fire from some politicians, who question the offshore outsourcing trend because it threatens U.S.-based jobs.

Deal 2: Oracle Beats Microsoft. Although Exchange Server remains the most popular platform for corporate e-mail, at least one company is giving Microsoft’s messaging platform the boot.

Indeed, John I. Haas Inc., the world’s largest producer of hops, has made the move to Oracle Collaboration Suite and unplugged Exchange. As a result of the project, completed last year, Haas’ employees can now access e-mail, business documents and companywide calendars via PCs, Internet connections and mobile devices. In a prepared statement, Haas VP of Information Solutions Kyle Lambert predicted that Oracle’s collaboration software will deliver a 170 percent return on investment.

Sounds impressive, but I don’t see many companies following Haas’ lead. Oracle has spent millions of dollars promoting Collaboration Suite as a bulletproof alternative to Exchange. But the results have been mixed. During Oracle’s most recent quarter ended Feb. 29, application sales—which include Collaboration Suite—were essentially flat at $140 million, according to the company’s most recent 10-Q filing with the SEC. In stark contrast, Microsoft’s server software sales rose about 25 percent during the first nine months of fiscal 2004 due to growth in “Windows Server license sales as well as growth in SQL Server and Exchange Server revenue,” according to Microsoft’s latest 10-Q filing.

Translation: Haas’ e-mail switch from Microsoft to Oracle might be the exception rather than the rule.

Accenture Stands Tall.

Deal 3: Accenture Stands Tall. A week after the Illinois comptroller halted payments to Accenture, the consulting firm regained its footing by winning an outsourcing deal with Payless ShoeSource, which operates roughly 5,000 retail shoe stores.

Payless’ same-store sales rose 4.7 percent in April, but the company isn’t resting on its laurels. Through its relationship with Accenture, Payless hopes to increase online channel sales by 15 percent to 20 percent annually and significantly improve the conversion rate for people visiting the site. With those goals in mind, Accenture will design, launch and manage a new customer-facing retail Web site for Payless. Accenture will leverage Interactive Retail Services, a set of software components based on Microsoft Windows, for the project. The software provides retailers and branded manufacturers with hosted Internet services.

When Microsoft introduced Windows NT in 1993, retail was the first vertical market to give the operating system serious consideration. By 1995, eight of the top 20 retailers by revenue were deploying Windows-based networks because it offered a lower-cost alternative to proprietary Unix-based servers.

Deal 4: Homeland Insecurity. When Baseline magazine explored the state of U.S. seaport security in September 2003, many readers were shocked by the article’s disturbing conclusion: Two years after the Sept. 11 terrorist attacks, our nation’s system of seaports remained very vulnerable to attack.

Solutions providers are aware of the situation. Just last week, Ciber Inc. and the College of William and Mary won a Federal Port Security Grant from the Transportation Security Administration (TSA). The grant, part of the Port Security Research and Development program, calls for a contingency plan incorporating decision support technologies. The technologies will optimize the rerouting of cargo and ship traffic in the event of an emergency that would close large seaports. Ciber was selected as part of the William and Mary team based on its extensive experience in port systems and services, including the development of the Ciber Harbor Management & Security System (HMS).

I wish more companies were following Ciber’s lead.

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 (joe_pan5@yahoo.com) has covered Silicon Valley since 1992. He was most recently editorial director at NYIT (www.nyit.edu) and returns to Ziff Davis Media Inc. on May 10.