AT&T to host key federal Web portal

AT&T hopes to raise its profile in the Web hosting market following its recent win of a high-visibility contract to support the federal government's Web portal, FirstGov.gov, which is one of the most visited sites on the Internet.

Receiving more than 50 million hits last year, FirstGov.gov is the central location for U.S. citizens to access online information about a variety of government services, including passports, taxes, student loans, benefits, auctions and national parks. The popular site catalogs more than 51 million federal, state and local government Web pages.

AT&T will host the FirstGov. site on two of its 18 Internet data centers worldwide. AT&T also will design and deploy a suite of managed security services, including firewalls, intrusion detection, risk assessment and business-continuity planning.

The federal government's General Services Administration last month awarded AT&T a four-year, $7.6 million contract to host FirstGov.gov. AT&T's partners on the contract include Sun, Oracle and Mercury Interactive.

"It's a great deal for AT&T," says Carrie Lewis, an analyst at The Yankee Group. "They are becoming a stronger player in Web hosting. They're one of the most stable players in the Web hosting marketplace, and this contract is indicative of that fact."

Lewis says AT&T should be able to leverage the FirstGov.gov win in the government sector, which has a growing need for Web hosting, and in the highly competitive commercial sector.

"They are going to have to build some sort of ironclad security platform for the federal government," Lewis says. "If they can build this platform and deliver it, then they can repackage it and offer it to other industries."

That's exactly AT&T's plan, according to company officials.

"AT&T is not top-of-mind for Web hosting," says Don Teague, vice president of civilian sales for AT&T Government Solutions. "For most government agencies and most commercial [accounts], if they made a list of the top five firms in hosting . . . we wouldn't show up very often. That's too bad because we have a phenomenal capability borne of our huge network."

AT&T plans to use the FirstGov contract to help deliver the message that Web hosting is a core capability for company.

"Why are we so heavily invested in this and why are we getting so good at this? Because so many of our customers are going to hosting," Teague adds.

"We will provide a very secure network environment as well as the physical environment," he says. "You almost can't talk about hosting without talking about security, so we've put together an integrated approach. . . . With FirstGov, you'd be fooling yourself to provide this kind of connectivity without security."

AT&T was the incumbent contractor on the hosting bid because its subsidiary, GRC International, designed the original FirstGov site in the fall of 2000. Last March, AT&T won a separate five-year, $10 million contract to upgrade the search capabilities of the FirstGov site. AT&T will be earning about $3.9 million per year to support the FirstGov site over the next four years.

Having captured the FirstGov contracts, AT&T is positioning itself to pursue other e-government initiatives. The Bush administration has identified 24 high-priority e-government initiatives, including a digital signature project called E-Authentication and a portal for grant recipients and grant-making agencies called E-Grants. AT&T officials say they plan to pursue many of these opportunities.

"The key thing [with FirstGov] is its importance in the president's e-government initiatives and how this site is being leveraged into the ongoing 24 initiatives," says Chris Stelter, a director of sales engineering for AT&T Government Solutions, who runs the FirstGov program. FirstGov is "one of the linchpins."

"Over time, FirstGov will become the place for a lot of e-government transactions," says Cynthia Shockley, vice president of consulting at Federal Sources, a Vienna, Va., market research firm. "Applications like E-Grants will need to be secure, so I can certainly see the need for upgrading the security...This [contract] is a coup for AT&T."

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