"Eventually, the vast majority of public services delivered electronically won't be accessed on government Web pages, they'll be provided through indirect channels," predicts Mauro Regio, Microsoft's global industry manager for the public sector, with the air of confidence that can only come from working for a company sitting on $30 billion in cash. "Governments just don't know it yet."

Regio, an Italian national with a heavy accent, an even heavier IQ and a Ph.D. in computer science, is Microsoft's strategic thinker charged with figuring out where the government IT market will be in five to 10 years and positioning planet Earth's largest software octopus accordingly. Like all the other senior executives at this egalitarian company, Regio's office on Microsoft's sprawling corporate campus in Redmond, Wash., is tiny (12 feet by 10 feet) and nondescript -- his principal decoration being a large whiteboard that he jumps up from his desk to write on at least every 15 minutes throughout the course of our three interviews.

I began my conversation with Regio by asking why, despite the hundreds of millions of dollars governments have spent Web-enabling their services, only a small percentage of citizens actually conduct their business with the public sector online. "Citizens are on the Net, but not necessarily on government portals," explained Regio. "They're somewhere else; they're on portals like MSN, AOL and Yahoo and commercial and entertainment sites. That's where they spend 95 percent of their time online."

The most obvious way to rectify the failure of the public sector's "If-we-build-it, they-will-come" online strategy is advertising. State, local and federal agencies theoretically could spend millions, or billions, advertising on TV, radio, newspapers and the Internet in order to drive more traffic, and thus transactions, to their Web sites. But marketing budgets anywhere near the reach of the major commercial portals simply aren't going to happen at a time when tax revenues are in a scary free fall that threatens to leave crucial education and public safety initiatives under funded.

What To Do?

Instead of trying to figure out how to get customers of commercial sites onto government sites, asks Regio, why not try the opposite? "Governments should be bringing their services to where their customers are, instead of waiting for [customers] to come to them," Regio said, and they can accomplish this by extending to the Net the service networks they've already established with banks, retailers, sporting goods stores, car dealers and other private partners in the bricks-and-mortar world. "You can buy a fishing license in a sporting goods store," he said. "A car dealership will handle your motor vehicle registration for you when you buy a car. Why not apply the same concept to e-government services?"

Banks and brokerage firms could offer online tax filing. REI.com could make your state park camping reservations and procure your fishing license even as you're buying your camping and fishing gear on their site. Healtheon/WebMD could provide online Medicare and Medicaid benefits registration. Travel Web sites could offer real-time passport renewal. Trade associations could provide online business-license renewal, while business portals specializing in trade, insurance and construction could offer a host of online government services to their members.

With e-government service networks, private service providers would bundle existing public-sector transactions into their services and transactions, leaving government portals as just one channel -- instead of the channel -- for doing these transactions. "Plenty of media companies that have tried to attract people to their portals have failed miserably," said Forrester Research analyst Jeremy Sharrard. "It's a bit of a stretch to think that government can drive enough traffic to their sites to get high take-up rates. But there are already lots of successful commercial portals driving lots of traffic. There's no reason why governments can't link in with them."

The Gartner Group goes even further in a

William D. Eggers  |  Contributing Writer