For VARs, Stimulus Package Ushers In New Opportunities

In fact, the savviest VARs are already spotting opportunities, from total modernization upgrades to the General Services Administration (GSA), Department of Health and Human Services (HHS) and the Department of Defense (DoD), to green infrastructure initiatives and broadband expansion.

In this environment, the advice given by everyone from government IT analysts to vendor executives targeting the public sector to VARs themselves is simple: Don't wait.

There's a better read on where the money is going to go now and in what forms, and those who hesitate are going to be left out in the cold.

"Education? Health care? Security? How is it going to flow into education or security? Is it infrastructure? New buildings? Grant initiatives? There's a lot of confusion when you look at what's coming down," said Mike Humke, vice president, public sector for Hewlett-Packard's Solution Partners Organization. "I say, let's watch to see where it's going, but let's not wait. Why wait? You can show a superintendent how to take a budget and make it work. Stop being a deer in the headlights."

"The pace at which to invest and pursue the projects that will be spawned by the stimulus package is really up to the judgment of the individual VARs," said Rick Marcotte, President and CEO of DLT Solutions, a Herndon, Va.-based solution provider. "There is probably a little more certainty on the federal side than the [state and local] sector. There are still plenty of unknowns on the S&L [state and local] horizon in terms of amounts pushed down to the states, the timing of that funding and the ultimate projects undertaken."

The clues have been there all along, said analysts, regardless of squabbling in Congress and constant revisions to the master plan. As the House version of the plan emerged late last week, government IT research firm Input had the number of federal contract opportunities pegged to be about $62 billion, and state and local opportunities at about $4.5 billion.

Differences emerged in the Senate version, of course -- and the finalized $789 billion package is trimmer than both the House's and the Senate's -- but many of the IT commonalities remain, if the numbers are a little different.

"We knew it would be a constrained budget anyway," said Jeremy Potter, a senior analyst at Input. "When you add the fact that we've had economic difficulties and there's a need for both a TARP [Troubled Asset Relief Program] and a stimulus, that's actually creating more spotlight on the money than there would otherwise be. And the other thing about the timing that's good is that agency officials are jockeying for this money and they know the Obama administration is going to be making some of those calls. If particular agencies are jockeying for money, then solution providers know where to look."

The trick, said Potter, is not to get bogged down in the details of the spending but to be ready to take advantage of opportunities as they arise.

"The way this funding comes through the Bill is important," Potter said. "Whether it's a contract, or a grant, or broad spending allocated by the secretary of a department. You [a solution provider] don't want to jump at the opportunity only to find out it's a grant, not a contract. You have to look at finding out which ones are likely to go into contract per department."

"Think about where the addressable market is," said Ray Bjorklund, senior vice president and chief knowledge officer at FedSources. "Think not only about what dollars are going to be appropriated but how many are actually going to end up in the hands of contractors. You have to prioritize all your planning and get sales organizations to think that way, too. Should [VARs] go knock on the door of Indian Health Services? Maybe, I don't know. But VARs and solution providers can't afford to sit around and wait. Should they act today or tomorrow? No. But they should plan today and tomorrow."

If there's a piece of the stimulus going toward, say, facilities upgrades and the push to smart buildings, or improving the wireless network for first-responders, Bjorklund said, consider what that means.

"While that may not have traditional VAR perspective," he explained, "you can imagine the spin-off in places like dispatch centers and telecom gear in law enforcement vehicles. Even in places like explosive detection systems -- that's not traditionally an area for a VAR, but in the different modes of transportation, even containers, there's probably some pretty good opportunities."

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