Wang boosts fed strategy with I-NET buy

Wang Laboratories Inc. bought networking company I-NET Inc. last week for $167 million, positioning both companies to expand their presence in the federal marketplace. The acquisition was first reported in Federal Computer Week July 22.

According to the terms of the deal, which must still be approved by federal regulators,

I-NET will become a wholly owned subsidiary of Wang, and the purchase will not affect any of I-NET's contracts. Ken Bajaj will remain president of

I-NET.

Access to New Customers

For Wang, the purchase offers access to customers linked by wide-area networks and emerging intranets, while I-NET, which specializes in network management, gains the ability to pursue more local-area network clients, executives from both companies said.

"I know of no federal government agency or any company that doesn't have solid plans to head to the network-based computing paradigm," said Wang president Joe Tucci in a telephone interview last Wednesday.

State Dept. Program Targeted

For instance, Tucci said, the I-NET buy will make Wang a stronger contender for new contracts as its largest federal customer, the State Department, replaces aging mainframes with a worldwide network.

Earlier this month, State launched a $291 million office automation and network procurement that would replace existing Wang equipment.

Tom Koulopoulos, president of Delphi Consulting Group, Boston, said the purchase is the latest in a series of strategic acquisitions through which Wang is building its corporate capabilities infrastructure.

For example, he said, Wang has tripled the number of seats for its software products in the past few years and needs to provide support services for the networks those seats represent. I-NET fulfills that need, Koulopoulos said.

Doug Keach, group president of corporate development with I-NET, said the deal "doubles our base of federal presence."

I-NET, which had $327 million in revenue in 1995, began doing business in the federal market as an 8(a) company in 1985.

It graduated from the small-business set-aside program in 1994.

I-NET's federal contracts include a recently awarded facilities management contract with the U.S. Postal Service.

Wang earns $250 million in revenue from its federal contracts, which include part of the $81.6 million Electronic Data Management system for the Defense Finance and Accounting Service.

Tucci said any merger of Wang and I-NET operations would be limited to "back-office" functions, such as accounting. Both companies, he said, plan to expand their technical staffs.