Original story: http://www.statesman.com/news/texas-politics/state-to-stick-with-ibm-on-data-contract-693610.html

State to stick with IBM on data contract

Officials say they might farm out some of the work to other companies, though.

AMERICAN-STATESMAN STAFF

Published: 9:27 p.m. Monday, May 17, 2010

State officials say they will for now tough it out with IBM Corp. on a troubled data center consolidation project.

But IBM, the lead contractor on the $863 million project, could end up as a smaller player in the effort to merge the data centers of 28 state agencies into two upgraded and streamlined facilities.

The mammoth project has been dogged by delays, equipment failures, losses of data and deep frustration among state agencies.

Since the fall, new leadership at the agency overseeing the contract, the Department of Information Resources, has been digging into the roots of the problems with the aim of turning the project around.

Amid that re-examination, it has seemed at times that ending the seven-year contract with IBM was the most likely outcome.

But Ed Swedberg, the department's deputy director of data center services, said Monday that there are no plans to terminate the contract at this point.

There would be too much to lose for all sides by unwinding the contract, and IBM is still a willing and able partner, he said.

IBM spokesman Jeff Tieszen said the company is working with the state to move the project forward. IBM has been paid more than $442 million since the contract was signed in 2006.

Swedberg said the state has the flexibility it needs under the existing contract to fix the service problems at the root of the frustration.

Karen Robinson, interim executive director at the Information Resources Department, noted that IBM's customer service ratings have consistently been very low.

"I'm not happy with the way the agencies are being helped," she said. "I prefer to have happy customers."

The agencies have consistently complained about the slow progress toward consolidation, ongoing maintenance problems and insufficient data backups. The secretary of state's office last year got permission to pull its elections database out of the project because of concerns that IBM could not ensure its availability during elections.

To improve the service, one option being considered is to farm out some of the responsibilities that now fall to IBM to other companies, Swedberg said. The state would need to seek new bids if it were to do that.

Details will not be available until July on how the project could be broken up. New cost estimates for the whole project would then follow, based on the new bids.

The data center consolidation effort was sold to the Legislature as a money-saving measure as well as a way to improve operations and security.

Swedberg said he is still confident that consolidation is the right thing to do. But it is going to take much longer than initially promised. Under the original timetable, all of the agencies' servers were supposed to be operating out of the consolidated facilities as of December 2009. So far, only 10 percent of the servers have been moved.

The state agencies at the center of this maelstrom simply want the service problems fixed, said Adam Jones, the chief operating officer at the Texas Education Agency.

He credits Robinson and Swedberg for improving communication with the agencies and giving them more ownership over the project. But bringing this project to a peaceful resolution will be tough, Jones said.

"They have what appears to be a very intractable problem," said Jones, who sits on a committee of agency executives involved in the project.

kalexander@statesman.com; 445-3618