asset ownership environment in the state - as far as data centers are concerned - to a consumption model.

DIR manages the delivery of data center services to the 27 agencies as the holder of the master contract. In other words, a master contract exists between the vendor - we call it the IBM team for Texas - and the DIR. As the contract owner, the DIR is the single throat to choke, so to speak, for participating government organizations. We are fully accountable to the 27 state agencies that are part of the deal today.

There were really four major phases to get us where we are today. First and foremost, coming out of the legislative session two years ago enabling legislation, HB 1516, which has gotten some national attention.

The second major phase was a procurement phase. That was an 18-month process - the development of the solicitation, review of the proposals and execution of contract. It was driven by DIR, but we had very high levels of participation by all 27 state agencies that were involved.

The third major phase was the one we just got through - legislative funding. We have a biennial legislature in Texas, which just concluded, and a big part of our role in this project over the last five months - 140-day legislative session - was to secure funding for the contract. Now, we're in the phase you guys want to talk about, which is contract execution. We did execute the contract in late November 2006. We commenced services, or the IBM team for Texas commenced services, at midnight on March 31.

In the implementation of the project, there are three major phases. There's what I call an agency transition phase, which is occurring right now. There's a transformation phase, and then there'll be a consolidation phase.

So the agency transition phase is the turnover of systems and assets to the vendor team, as well as the transition of state staff to the vendor team. A number of state staff were transitioned to the vendor. That's all been occurring since the March 31 commencement.

Starting this summer, we move into the second major phase: the transformation. The IBM team has actually taken over the operations of the 30 agency data centers at those data center locations. The transformation phase is really the implementation of consistent processes and tools and metrics across those 30 data centers and the 27 agencies, so that's occurring as we speak and will occur over the next year or so.

And ultimately, probably in parallel with the transformation phase, is the consolidation phase. That's the consolidation of the 30 data centers into two data centers. We're going to be implementing in two data centers a single command center, and that's where the optimization - and I'm talking about the financial savings but also operational efficiencies and improved service levels, improved security, improved disaster recovery - really gets traction. That will occur starting this summer and over the next at least 18 months.

Individual agency data centers will be consolidating into those two data centers in a waved approach. It's not a big bang; it's very well thought out, very disciplined, very methodical. Those data centers will be consolidated one-by-one over the next 18 months.

So you've got a lot of agencies that are transitioning from owning and operating computing assets to becoming consumers of services.

Yes absolutely. It's a huge paradigm shift in that agencies had independent authority and ultimately ownership of those assets and ownership of those facilities, and that model has shifted significantly to a consumption mindset, a consumption model.

That changeover must really put a premium on your agency's contract management skills once this is all in place.

It does, but I will tell you, it really is

Steve Towns  |  Executive Editor