WORLD'S LARGEST PRIVATE NETWORK - EDS
Yesterday and Tomorrow live side by side in Plano, Texas.
Alongside a field containing a few grazing buffalo, lies another
field formerly known for its corn. Today it holds the largest
private digital/fibre-optic/satellite communications network in the
world, EDS. The building phase of their new global headquarters is
about one-third completed.
As you can see from the accompanying picture, this control room tends
to make the one at the Space Shuttle's Mission Control look like a
covered wagon. Here they have, according to USA TODAY, "enough
computing power to balance 5.4 billion checkbooks -- one for every
person in the world -- in one second."
They also have robot magnetic tape switchers, operating in a very
large "window case" -- who make 35,000 physical transactions -- a
The organization is now just known as EDS, formerly Electronic Data
Systems, Inc. of Dallas, Texas. It was created by legendary and
charismatic founder H. Ross Perrot who sold out -- for a reported
$742.8 million in cash -- to General Motors in 1984, after telling
GM Chairman Roger Smith he wasn't running the business very well. It
appears to have been a win-win sale. It made Perrot a billionaire
and EDS has since exploded to be a $7 billion dollar a year empire
just like the Apple Corporation who now are both a vendor and client
What kind of a business is this? Let's first look at what growing
today in our changing world. Once upon a time companies and municipalities both thought they could do everything on their own. In the
industrial age this was possible. Cities, towns and villages used to
collect their own garbage, clean their own buildings, towed their own
parking violators or repaired their own streets, ran their own jails,
police and fire departments.
Companies did the same in their fields. Then both cities and
companies found out that other organizations that concentrated on
collecting the garbage or repairing the streets, handling telemarketing, video production, tax accounting or computer processing
were capable of doing a better job and doing it for less money.
Companies found there were certain tax advantages too. Like not
depreciating your own trucks over long periods of time but being able
to write off immediately the monthly fee charged by the contractor.
They also no longer have the headaches over running their own,
sometimes touchy computer mainframe's staff. As well, because of
their purchasing "clout" some of these companies purchase in greater
quantities and hence, receive a better price. The whole process is
today called "outsourcing". EDS is the worlds largest outsource in
the communications field.
According to USA TODAY "one in every 20 Fortune 500 companies uses
computer services such as EDS. By 1993; one of every five companies
will need an outside computer service company's help -- and EDS
should be the largest benefactor."
EDS visits your company, finds out what you are trying to accomplish
and provides the latest equipment and the best communications system
to link up all your many prevailing systems and equipment, all over
the world if necessary, and rolls it all into one "seamless"
operation. Since they do not manufacture any computer or other
hardware equipment themselves they have no built-in bias (they do
create software). They use Apple, IBM or other computer hardware
when it's the best available to solve any particular need. They are
the world's largest user of IBM mainframes. They have over 100 of
them. Can you imagine the price they get when they deal? Nobody,
but nobody can compete with that -- even IBM. And, if they don't
like the quoted price they can go elsewhere.
They must be doing something right. Since 1984 they have grown from
$750 million a year gross to today's $7.1 billion (They have over
7,000 customers and about 70,500 employee's -- in 80 countries).
They enter into up-to 10-year long leases with clients. When you
sign on with them they will usually purchase what equipment you have
on hand and, in many cases hire all your present staff. To show you
how much superior training their own staff obtains and your ex-staff
will receive, they spend $100 million a year on training. One in
every five EDS employees is a systems engineer. They have a lawyer
for every 2,300 other employees. What is that saying?
When I view a company like EDS, I like to look for what's creative
behind the large numbers. I found EDS won a five-year, $400 million
contract in Chicago -- to solve that city's parking ticket problem.
Seems as how Chicago was one year in arrears in keying into their
computers the 24 million parking tickets issued covering their 25,000
parking meters. First, that showed me at least, that they were
finding necessary business clues then converting those clues into
Other competitors were on the Chicago trail also, but only EDS came
up with a sample presentation utilizing hand-held, personal computers
that would issue tickets and insert that data into the city's
computer each day. One more sign of innovative thinking: The very
largest excuse for not paying a ticket in Chicago has been that
motorists claim the famous "Windy City" winds had blown the ticket
away before they returned to their vehicle. The EDS proposal
included tickets with Post-it note adhesive to retain the ticket
until the driver did return to his car!
They also provided an electronic imaging system that can produce an
image of the ticket issued on to a computer screen. The city now
holds neighborhood hearings instead of costly court time. Before EDS
took over only 10 per cent of the tickets were paid within a year
(remember, the city was a year behind in issuing such tickets). It
is already up to 47 percent and climbing. Revenues from parking
violations are estimated to increase 62 percent this year to more
than $60 million. EDS did obviously, what the city could not do by
themselves and Justice is no longer denied by being delayed.
(EDS is a self-operating subsidiary of General Motors. Once 70
percent of their total billings was with the parent company. It has
now dropped to below 50 percent as new, independent "outsourcing"
business became the growth market.)
Have a computer system problem? Want to "go global"? Who ya' going
7171 Forest Lane,
Dallas, Texas 75230.
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