History (1994) Enormous Contract for IBM From Internal Revenue Service

The Internal Revenue Service (IRS) signed an enormous image deal with IBM’s Federal Systems Division which was sold in March to Loral Corp. (Gaithersburg, MD) for $1.57 billion.

It is a $1.3 billion contract to turn billion of pages into electronic images on optical disks. The 15-year contract is part of a long-term tax modernization program that may cost as much as $12 billion.

Eastman Kodak is the main subcontractor of Loral for the shipments of scanners, 14-inch drives, jukeboxes and WORM media.

“Kodak will earn several hundred million dollars from the contract over its 15-year life,” said the Rochester company.

According to R. Jack Harshbarger, GM, mass storage products, EIPC at Eastman Kodak in Rochester, NY, it will take close to 4 years to build the system that will require hundreds of jukeboxes.

The IRS plans to implement the Document Processing System (DPS) in phases, ultimately outfitting the IRS Detroit Computing Center and each of 10 IRS Service Centers. Full operation in Detroit is scheduled for 1997, with the contract providing operations and maintenance through the first decade of the next century. As of the year 2001, it will cover 312 million forms a year.

This agreement is a real lifesaver for Kodak which scores an important point in front of its 12-inch WORM competitors like Sony, Hitachi, LMS or ATG Cygnet.

Until now, Kodak’s 14-inch WORM, marketed for several years, had hardly been successful (only half dozen sold in Europe for example). Even if the US company managed to get its media standardized, customers were scarce for a proprietary technology since Kodak is the only manufacturer of the media, the drive and the jukebox. We imagine that IRS has taken serious guarantees on the duration of the 14-inch media activities from Eastman Kodak which is in fact actively launching the product again since its agreement with IRS.

Evolution will keep on. Harshbarger already promises for the 2H94 a WORM disk that should grow from 10.2GB (6.8GB at its beginning) to 13 or 15GB. The 14-inch WORM, which seemed left behind, is again in the act.

And now Kodak has in its catalog a new series of System 2000 jukeboxes. The base unit is confiqurable with 15, 25, or 50 media slots. A media expansion module features an additional 84 media slots for a maximum capacity of 1.366GB.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 76, published on May 1994.