In new enterprise license deal, DISA hands out IBM AntiVirus

The Defense Information Systems Agency is distributing IBM Corp.'s AntiVirus software
free to users across the Defense Department, even though DISA has an enterprise license
for similar software from Norman Data Defense Systems Inc.

DISA licensed the IBM product in a June 13 deal with Indelible Blue Inc., a Raleigh,
N.C., reseller on the General Services Administration's Multiple-Award Schedule. The
one-year agreement, worth $200,000 to $500,000, allows DISA to distribute AntiVirus [GCN,
Aug. 28, 1995, Page 39] and its upgrades electronically to all the armed services and DOD
agencies, according to IBM.

The arrangement restores IBM to the position it enjoyed in February 1995, when DISA
awarded a contract for a DOD-wide enterprise license to CCL Inc., a Bethesda, Md.,
reseller of IBM AntiVirus, extending an already-broad DOD service contract for IBM
virus-protection software.

That award was protested on the grounds the solicitation was a small business set-aside
for which IBM didn't qualify. The Small Business Administration agreed, and DISA was
forced to recompete the contract.

Norman Data Defense Systems, an Oslo, Norway, company that at the time had only a
handful of U.S. employees in Falls Church, Va., won the unprecedented right to supply 1.5
million DOD users with anti-virus software. According to Jay Heiser, Norman's marketing
manager, the $218,000 contract stated explicitly that Norman was "DOD's anti-virus
software firm."

But DISA's relationship with IBM survived and thrived. Tom Morrisey, an IBM marketing
executive, said, "DISA continued to renew our anti-virus service contracts on a
month-to-month basis after it awarded the Norman contract."

The month-to-month renewals gave DISA an alternate source of virus-protection software
during distribution difficulties in the early stages of the Norman contract. According to
David Stang, who ran Norman's U.S. office when the contract was awarded, the company had
little experience with electronic software distribution.

Stang said DISA wanted to distribute the software via File Transfer Protocol and an
electronic bulletin board system at its Center for Information Systems Security.

"We were forced to kludge together a set of .ZIP files that people could download,
but our product was really designed to install from disk, so the install situation was
lousy," said Stang, who left Norman last summer.

Norman's product, which took up a minimum of 1.6M on a hard drive, also had memory
requirements that exceeded the capacity of many old PCs in DOD. The result, according to
Stang and government sources, was a flood of calls to DISA from angry users who could not
properly install Norman's product or found that it overwhelmed their systems.

DISA and Norman eventually worked out many of the problems, but by then most users had
turned to other sources for virus protection. "I had one competing vendor tell me
they'd made as much in the first few months of our contract as we were supposed to make
[over two years]," because of the unhappy customers, Stang said.

Norman's difficulties also benefited McAfee Associates Inc. of Santa Clara, Calif.,
which also had many DOD customers when the Norman contract was awarded. Customers
"came back in droves" after dabbling with the Norman product, said George Daly,
McAfee's defense markets manager. Daly said McAfee's DOD revenues actually increased after
the Norman contract award.

A DISA statement said the new IBM agreement is not meant to supersede the Norman
contract. "The [IBM] contract was awarded to provide a more robust anti-virus
capability to the DOD community," the statement said, and the two contracts will
"co-exist and complement each other."

Norman's Heiser said the new arrangement "is a bone of contention" between
Norman and DISA. He said the company was led to believe DOD would have only one official
anti-virus contractor.

Norman's contract is up for renewal in September, and DISA has not decided how it will
proceed. IBM sources said they had the impression their company would become the sole DOD
virus-protection supplier after the Norman contract expires.

IBM's AntiVirus 2.4 Enterprise Edition protects Novell NetWare and Microsoft Windows
LANs; a desktop edition guards MS-DOS, Windows and IBM OS/2 Warp PCs. IBM makes monthly
anti-virus updates available.

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