Invention, the mother of profit

A California municipality with a strong information technology department is trying to recoup its investment in self-developed systems by licensing its applications to other cities through a commercial reseller. Buyers would benefit from a ready-made, proven system from a developer that intimately understands municipal user needs, said officials, vendor representatives and analysts close to the effort.

The city of Sunnyvale, Calif., is marketing its electronic permitting, engineering management and reservation systems through GovPartner, an e-government solutions provider in San Diego. Although there are joint public/ private software development efforts that have led to licensing agreements, officials with the project said the Sunnyvale effort is unique because the city went solo.

It's an approach that Costis Toregas, president of Washington, D.C.-based Public Technology Inc. (PTI), said he is encouraging among the 100 governments that belong to his nonprofit technology organization. "The marketplace is a wonderful place to promote that innovation," he said.

The Sunnyvale City Council approved a relicensing agreement at the end of September with Berryman & Henigar Inc., a municipal professional services firm and parent of GovPartner. The move came after a half-dozen cities approached Sunnyvale about buying its applications, said Michelle Kvandal, senior vice president for GovPartner. The city will receive royalties and free software maintenance, enhancements and support.

"I get maintenance and support for that application for seven years, so I can divert resources to other things," said Sunnyvale CIO Shawn Hernandez.

Sunnyvale's relicensed software suite includes:

* e-Permits (www.e-permits.net/sunnyvale), a Web-enabled application that allows the public to apply for, pay for and obtain a number of building- related permits via the Internet. The e-Permits software has been recognized as a PTI "Top 25 Technology Solution," and a civic.com State and Local 50 winner.

* SunGIS, a Microsoft Corp. SQL Server-based planning, building safety and code enforcement management system.

* Parks and Recreation software, an online facility reservation system.

E-Permits is the front-end application for SunGIS, which was developed along with the Parks and Recreation package by in-house IT staff. The e-Permits software was the result of a joint effort with Carta Inc. and Microsoft. GovPartner plans to make the back-end SunGIS and Parks and Recreation systems accessible online, Hernandez said.

Sunnyvale officials were not satisfied with vendor offerings when they decided four years ago that they no longer could live with the limited functionality of their legacy Cobol systems, Hernandez said. The city, which has a relatively large IT staff of 30, had a prototype SunGIS system ready within 30 days and operating within eight months.

Sunnyvale directly sold SunGIS to the neighboring city of Mountain View, Calif., for $150,000 in 1999. That experience led Hernandez's Information Technology Department to build flexibility into the system so that other cities could easily integrate different options into their workflow. For instance, Sunnyvale calculates building permit fees on square footage, while Mountain View bases them on the number of fixtures. In the wake of the Mountain View sale, city officials felt it was inappropriate for a municipality to be competing with the private sector, and it looked for another approach to maximize their investment, Kvandal and Hernandez said.

Aside from the concern about competing with private industry, there are legal issues, said Christopher Baum, vice president for electronic government at Gartner Group Inc., an IT consulting firm. "The software, [it] could be very strongly argued, is a public domain property," he said.

Sunnyvale and GovPartner officials say they expect their relationship to lead to more product releases. GovPartner will create applications based on specifications provided by the city's Information Technology Department, which in turn will test and incorporate the new service into its own systems and even serve as a demonstration site, all the while maintaining an exclusive license, Hernandez said.

The Information Technology Department has negotiated tight controls to protect its interests and ensure customer satisfaction, Hernandez said. "We built performance standards and measurements into the agreement because the product will have our name on it as well," he said. Furthermore, the city is maintaining its right to the source code so that it can upgrade applications for its own use without having to rely on GovPartner's timetable, Hernandez said. "It's the city's investment, so why shouldn't they benefit? When you have a city that is progressive, other cities can benefit from that, too," Toregas said.