County turns computer space to cash

Orange County, Calif., hopes a new business deal will turn excess data processing

capacity and other information technology resources into profit.

Orange County will receive $21 million from an expanded partnership

with Lockheed Martin IMS Corp., said Leo Crawford, the county's chief information

officer.

The additional revenue should help offset the $260 million cost of the

county's new information systems and telecommunications contract with Lockheed

Martin. Under the 11-year agreement, Lockheed Martin will use Orange County

facilities as a base for other outsourcing contracts. The company plans

to offer surplus mainframe computer space and shared personnel and infrastructure

to attract network support, printing and Web hosting contracts.

Governments are exploring new ways to pay for electronic government

infrastructure, "but this sort of approach is relatively unique," said Rishi

Sood, principal analyst for Gartner Group Inc.

Lockheed Martin officials forecast an additional $250 million in outsourcing

revenue from other public and private clients in southern California. Orange

County will share that windfall. On top of its $21 million payment, spread

out over the course of the contract, the county will receive 5 percent of

annual gross revenues exceeding $8.5 million, said Naomi Marr, vice president

for business development technology solutions.

Lockheed Martin IMS already processes data for the region's Transportation

Corridor Authority and other public agencies. It also provides network support,

mainframe programming, Web development and other support services to Orange

County.