EDS storms into Web shop arena with 180 staffers

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The lines of competition just got more hazy for ad agencies and Web developers.

EDS, the giant information technology company known for its back-end and operations development work, today officially unveils a new business line specializing in creative and marketing strategies for consumer marketers on the Internet.

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Called c2o Interactive Architects, the new company rides the tide of a major shift in Web development away from corporate vanity sites and toward using the Internet as a highly sophisticated, functional marketing tool.


c2o, whose name is short for Chaos to Order, already has a staff of nearly 180. Although it opens with only one announced client, a creative assignment from Hachette Filipacchi Magazines, it has a wealth of blue-chip EDS clients to call on, ranging from General Motors Corp. (EDS' parent until last year) to Pepsi-Cola Co.

"Our entire mission is to change chaos into a state of order when we get to the bottom of an issue," said P. Craig Turner, VP-creative development and a former senior VP with Chicago-based agency Eagle River Interactive.

Other key executive staff at c2o include President William R. (Butch) Winters, who also serves as president of EDS' separate Internet & New Media business unit, VP-Sales Jeff Anderson, formerly national sales manager of the Internet unit, and Paul Roberts, VP-business strategies.


c2o is positioning itself as a key player not only in the creative development of Web sites, but also in Internet initiatives that have a foundation in business objectives and commerce.

"A lot of [the positioning] had to do with what we perceived to be a general lack of identifiable business strategies," Mr. Winters said. "The types of things that companies would normally do would be typically grounded in business planning. We didn't see a whole heck of a lot of that going on in the marketplace."

Commerce also will be a key focus; Mr. Anderson argues that it's an issue "a lot of traditional ad agencies can't address."

"c2o has the potential to combine the creative of the independent Web developers with the deep systems integration of an EDS," said Josh Bernoff, analyst with Forrester Research.

The Dallas-based company will draw on the business competencies of EDS' consulting unit A.T. Kearney, as well as EDS' formidable technology and operations background. EDS had revenues of more than $14 billion last year and has nearly 100,000 employees.

The Internet & New Media group, which Mr. Winters helped launch in 1995, has a client list including Pepsi's Pepsi World Web site, Procter & Gamble Co.'s Sunny Delight site and GM's Saturn Web site. It will shift its focus toward business-to-business intranet and Internet solutions.

EDS also has a massive facility in Plano, Texas, where it can host numerous client sites.

Hachette, an existing EDS client, has agreed to let c2o take over the redesign of its Web sites for Elle and Car and Driver. The creative on the sites was originally handled by @Radical Media, a New York production company.


As an Internet creative shop, c2o will compete directly with the agencies and Web developers its parent EDS has partnered with.

When GM launched its 1997 Buick Regal last December, the kick-off included an elaborate Web site teaming the efforts of EDS, CKS/New Media, the Internet Factory in Birmingham, Mich., and Buick agency McCann-Erickson Worldwide, Troy, Mich.

Now, depending on the project, c2o could compete with any one of these companies for work.

David Carlick, former exec VP of Poppe Tyson, Mountain View, Calif., said it's only natural that companies like EDS would enter the field.

"While the Andersens and EDS's are in a race to add marketing components," a company like Poppe isn't about to rush into the data giants' area of technical expertise, said Mr. Carlick, now president of media services for Power Agent, a Menlo Park, Calif., company.

Poppe worked with EDS on the Cadillac Web site.

"EDS has proposals in to clients, listing [Poppe] as their marketing partner," he said.

While c2o's Mr. Winters said some of these relationships will continue, he downplays partnerships with agencies like CKS and Poppe.

"Historically our relationships with them have been very small," he said.

Other information technology consultants, such as Andersen Consulting, don't currently offer creative and marketing services. But Wally Sipos, managing partner of Multimedia Factory, a solutions center within Andersen, thinks it's something that should be investigated.

"Right now it's still early," Mr. Sipos said. As time goes on, it will be easier to integrate marketing and transactions, something he senses clients wants to be merged.


While Mr. Winters assures that c2o will not attempt to be all things to all people, pointing out that it won't take on print, TV or radio work, being a full-service facility is a core belief for EDS, especially as more clients demand database-linked sites to conduct commerce.

The danger c20 faces is that it could become swamped with too many EDS assignments and simply be churning out Web interfaces. To succeed, c2o "has to grow as an independent business and not be perceived as an EDS utility," said Forrester's Mr. Bernoff.

Only time will tell whether c2o can grow into a creative marketing force in the stodgy shadow of the company Ross Perot founded more than 30 years ago.

Copyright April 1997, Crain Communications Inc.

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