Sears Goes on IT Spending Spree

Sears, Roebuck and Co. is investing its workforce with 21st century equipment to take advantage of streaming media technology, courtesy of a deal struck Tuesday with computer manufacturer Dell Computer Corp. .

The Sears CRT Replacement Project is part of a company-wide effort to modernize its IT infrastructure at 867 department stores nationwide. Officials plan to use the equipment to conduct videoconferencing sessions and other operations tasks. Not included in the upgrade are Sears
specialty and independently-owned stores.

The retailer already has 15,000 Symbol Technologies, Inc., 802.11b-enabled handhelds
scattered throughout its department stores across the nation, used for inventory and price checks.

Sears officials wouldn’t comment on the Dell contract price tag, but said it was substantial and outside the norm of regular workstation upgrades.

“I don’t think we’ve had an (upgrade) like this before,” said Jan Drummond, a spokesperson at Sears. “We’re using it for e-Recruiting and e-learning, something we have not done at all before.”

Drummond said the equipment would be delivered early in the fall. They include: 1,800 servers; seven storage systems; 3,700 new desktop PCs; and 14,600 monitors. She said Sears can’t afford to bring the Dell equipment in any earlier, since the holiday season “isn’t the best time” to
start new programs.

Retailers throughout the U.S., long considered the most reluctant to spend money on IT improvements, are set to beef up their networks in coming years, according to IDC. The research firm predicts IT spending by retail companies will reach $39.4 billion by 2006.

Christopher Boone, IDC senior analyst, said that although consumer spending kept the U.S. economy from further ruin in today’s markets, most retailers are struggling to maintain profit margins.

“Although the retail industry may lag others in IT adoption rates, leading retailers will continue to turn to IT to improve operational efficiencies and customer intimacy to gain market share from their competition.”

Sears has been continually updating and expanding its network to stay competitive. In January, the retail giant bought an extra 95 TB of memory to bolster its existing 45 TB information storage
system. It’s used to track customer spending habits, merchandising planning and e-business initiatives.

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