IBM blames state for data center troubles

By Kate Alexander | Wednesday, July 21, 2010, 01:15 PM

All the finger-pointing and fault-finding over the state's troubled data center contract has technology analyst Tom Starnes wondering if Texas and IBM Corp. want this marriage to work.

"It's like they don't want to be together and that's bothersome to me," said Starnes, who has been researching public-private technology partnerships, including Texas' $863 million data center consolidation project.

Breaking up, Starnes said, will do no one any good.

IBM's business reputation would take a hit, Starnes said.

And the state would have to start all over again with another vendor to merge the data centers of 28 state agencies into two updated and secure facilities. There is no guarantee the next relationship will work any better, he said. In the meantime, the agencies are stuck in a technological limbo.

But a split might be imminent. Last week, the state issued a 30-day warning to IBM that its contract could be terminated if the the company idoes not fix a raft of service problems and alleged contractual breaches.

IBM disputes that its service has been substandard and says it has fully upheld its end of the contract, according to a letter delivered to the state last week. It is not a response to the state's formal warning but addresses some of the same concerns raised in the warning.

The company lays the blame for the troubles at the feet of the Department of Information Resources, which is overseeing the contract.

"DIR's shortcomings have been an issue since the very beginning of this program," wrote Brian Whitfield, public sector general manager for IBM's Global Technology Services.

He cites two state auditor reports and an independent outside review that all, to some extent, found faults in the agency's oversight and management of the project. The examinations also found that the agencies did not transfer hundreds of qualified employees to the project, as required by the contract, and the agencies were not willing participants dedicated to seeing the project succeed.

The July 14 letter followed the breakdown of negotiations that were aimed at righting the mammoth project and salvaging the relationship.

At no time during those seven months of negotiations, which fell apart at the end of June, did DIR indicate that IBM's "approach was anything less than adequate," Whitfield wrote.

State officials, however, say they made clear as early as April that they were dissatisfied with IBM's performance and the lack of progress on amending the contract, according to a June 25 letter from the state.

The seven-year contract, which was signed in 2006, has been plagued by delays, service issues, equipment failures and other problems. The original contract called for all of the agencies' servers to be operating out of the consolidated facilities as of December 2009. At this point, less than 12 percent of that work is done.