Testimony from June 15, 1999

Prepared Testimony from John Keane, Keane, Inc.

Information Technology services companies design and implement the technology that helps organizations
be more successful. They are the people that integrate the computers, telecommunications software
products, and business processes and make them work together. They make a bank's ATM work, they
enable Charles Schwab to trade stocks, and their work allows Amazon.corn to function on the Internet.
I am John Keane, founder and CEO of Keane, Inc., a software services company headquartered in
Boston, with operations throughout the United States, Canada, and the United Kingdom. Keane helps
organizations Plan, Build and Manage Applications Software. Our clients include Fortune 2000
companies, government agencies, and healthcare organizations.

I started Keane in 1965. And, like many other start-up technology companies, began with few tangible
resources - mainly myself and a telephone. I located in an office over a doughnut shop in Hingham,
Massachusetts. I was young, and had the desire to build a new business. I knew I could help companies
apply new Information Technology to their business operations, much more effectively than they could
do it themselves.

Today, Keane is a company with over $1 billion in annual revenues, and 12,000 employees. We are still
applying new technology to our clients' operations and improving their business processes. But, we are
doing it on a much larger scale, and much more effectively than we did in 1965.Information Technology
services companies are making an enormous contribution to the American economy. In each of the last
five years, an average of 7200 such companies have been started, and during this time over 380,000 new
jobs have been created. Because of these efforts, United States is clearly leading the world in the use of
computer technology. According to a recent IDC report, almost 49% of the worldwide base of PCs at
Home and Education is located in the United States, and 47% of world-wide spending on IT software and
services is done in the United States. And, U.S. companies clearly dominate the market for computer
hardware, software and services.

A key question for all of us is: How does the U.S. maintain this leadership in a global environment that is
becoming increasingly more competitive, and which is changing very rapidly?
In the few minutes I have this morning, I would like to focus on three things that I believe contribute to
our industry's success to date -- and which are going to continue to be important to success in the future.
They are:
1. Open markets, free and fair competition
2. An educated and flexible pool of labor
3. Protection of intellectual property
First, Open Markets. Virtually every Information Technology company begins from a standing start, just
as Keane did. New ideas, creativity, but little in the way of financial resources. This is the definition of
"entrepreneur." It is important to note that many new businesses fail. However, some succeed, and a few
succeed big. These are the companies that permanently change how we do things. For the optimum
benefit of society, it is essential that the winners be determined by meritocracy, in a system based on open
and fair competition.Contrary to some people's opinion, it is small companies that characterize the
Information Technology industry. All of us are aware of the Microsofts and the Oracles, because they are
successful - just as we are aware of the Mark Maguires and the Sammy Sousas because of their success.
Whereas-it is the farm system that makes baseball, it is the emerging small businesses that give our
industry its vitality.

In my home State of Massachusetts, we have over 2500 Information Technology companies, employing
125,000 people, and generating $8 billion in annual revenues. About 75% of these companies employ
fewer than 25 employees. Public policy should recognize the importance of, and support the needs of
these companies. The first principle, as it is in the Hippocratic oath, should be "do no harm."
We cannot strangle America's high tech innovation with regulations, taxation and oversight. Work force,
work place, and industry legislation must be minimized for this industry to flourish; taxes, such as the
so-called internet tax, can have a major dampening effect on the pace of innovation required to maintain
our leadership position in this global electronic economy. Constant government oversight will have a
similar negative impact on high tech businesses whose existence depends on their ability to respond to
market dynamics unfettered by bureaucratic obstacles.

Second, An Educated and Flexible Pool of Labor. Information Technology requires an educated
workforce. Because of rapid changes in technology, there is a major shortage of talent. And where talent
exists, there is a need for continuous learning. Public policy should focus on the effective education of our
youth, which will be the builders and users of Information Technology tomorrow. Policy should also
facilitate the reaching outside of our national borders to bring in educated and skilled personnel. America
has always been the land of opportunity - and overseas skills can contribute significantly to the continued
development of our industry.

Legislation and programs must be introduced which fund K-12 education initiatives to promote science
and math interest at an early age; we must initiate programs to encourage the pursuit of advanced degrees
in the hard sciences, and we must adopt flexible immigration laws to ensure the availability of skilled high
tech workers and talented educators in this country.

In addition to talent, a major contributing factor to the success of our economy has been a flexible
workforce. The implementation of technology, by definition, is disruptive to the status quo. Painful at
times, changes are necessary for American businesses to be competitive in a global marketplace. Public
policy should do what it can to assist in the shaping of a flexible and competitive workforce.
Third, Protection of Intellectual Property. Intellectual content is the basis of the Information Age.
Conceptually, this is very different from the Industrial Age where tangible property was king. We should
do everything we can to encourage the development and protection of intellectual content. Copyright and
patent laws need review and updating to accommodate this new technology, both within our own country
and globally. Thank you for inviting me this morning. We all recognize that we are in a world of change
--- one that is driven by technology. I leave you with a quote. It goes something like this: "It is not the
strongest, nor even the most intelligent that survives, it is the most adaptable." The author is Charles
Darwin. His thoughts, which were directed to the evolution of living species, is extraordinarily relevant to
the development and success of the American species and its way of life. Thank you.