For VARs, Stimulus Package Ushers In New Opportunities

Solution provider respondents to Everything Channel's 2009 Growth Study, fielded in late December and early January, showed some optimism about their growth opportunities in government accounts, education accounts and health care accounts.

For government markets specifically, 40 percent of respondents to the study predicted growth in federal government opportunities, while there was less excitement (33 percent each) in state and local government opportunities. Thirty-four percent of respondents predicted growth in education opportunities, and 41 percent saw growth as a certainty in publicly funded health care.

"I hate the term 'cautiously optimistic' but I am because we are focused on SLED and health care," said Tim Barto, vice president of marketing at Troubadour LTD, a Houston-based solution provider. "There are certain IT initiatives that for many companies are nice-to-haves but are going to get cut out of everyone's budget. When you look at infrastructure needs for those markets, though, plus compliance issues, then they become things they [the companies] have to do."

Barto and other solution providers interviewed by Everything Channel reiterated the hot interest in wireless technologies in the public sector and, especially, health care environments, also citing virtualization, security and data center convergence as major plays for VARs.

"A lot of time and money are being spent on networks," Barto said. "They're saying, when all the consultants go home, how do we manage this beast? While they're not exactly suffering in SLED, they're still being asked to do more with less. We're having a lot of conversations with SLED and health care clients about standardization, virtualization, cost and complexity, and how to automate the core business processes so they can manage their environment when all the consultants go home."

Vendors, too, see those pockets as keys to growth in the verticals.

"I think you are going to see growth. Is it double-digit growth? No," said HP's Humke. "But virtualization, collaboration, maximization -- there's an awful lot of energy here. If we're going to improve productivity, it's got to start with technology. You can't throw a box at a problem -- it's a solution, and how you're going to use it. It's asking, 'Do I want to throw 500 PCs at a problem or a thin client and create a virtual environment?'"

Most solution providers agreed that, as in other sectors, unified communications especially has transformed from an encouraging trend into a major play in government agencies, health care facilities and educational institutions alike.

A recent survey by CDW-G found that 53 percent of those markets are either actively implementing or planning to implement UC solutions, and that 70 percent of the organizations currently in the UC planning and implementation phases expect to complete adoption in two years, regardless of how the economy continues to sputter.

"It has a lot to do with the consolidation of the number of devices they have for communication. Think of it that way," said Pat Scheckel, a senior director at CDW-G. "If I can have a pager, cell phone, desk phone, e-mail everything and have one number to dial and advanced cal lrouting functionality, that's big. The big thing to look at is the complete ROI. If you take into account all of their current spend, oftentimes they're spending on conferencing, spending on circuits and spending on other communications systems. Once you factor in all of this and compare it to both the capital and operating expenditures, you see very favorable ROI on a three-to-five-year time frame. We've seen payback scenarios in as short as 16 to 18 months."

Breaking down the UC study into market specifics, CDW-G found that federal government organizations are more likely to consider the continuity of operations benefit of UC to be very important (43 percent vs. 27 percent of respondents from the other verticals); state and local organizations are most likely to want an e-mail-centric approach to UC; health care organizations are more apt to select a telephony-centric approach to UC; and that larger, higher-education institutions with 8,000 students or more are more likely than smaller institutions to have developed a strategic plan for UC adoption.

Ron Sheps, vertical markets manager at distributor Westcon Group, suggested that while he was encouraged by growth potential in public sector and health care markets, the "wild card continues to be the stimulus package."

"I think you're going to see above-average growth this year for health care, and for the public sector," Sheps said. "If we were to pretend for just one second that the [stimulus] didn't exist, then health care would be hands-down the No. 1 growth industry. Education is continuing to grow, too. But wireless is going to be your growth this year. People don't realize the vastness of records in places like health care, and wireless is portable infrastructure."

The move to electronic health records and upgrading health care IT as a whole has really not been incentivized in the past to the degree it is at the present moment, said Harry Greenspun, chief medical officer for the health care group at Plano, Texas-based solution provider Perot Systems.

With billions headed for health care IT initiatives, "even in Washington, that's real money," Greenspun said.

Strong pushes like e-prescribing mandates and state-based initiatives are helping to turn the tide -- with 43 different bills in process or already approved at a state level, the National Conference of State Legislatures proclaimed that states are leading the way regardless of how the federal stimulus progresses.

"You have funding for the first time that was never there before," argued Janie Tramlett, senior vice president and chief marketing officer at Concordant, which specializes in electronic health record integrations. "People laugh at me sometimes, but this right now reminds me of the beginning of retail automation. The reason for that is that these are massive enterprise projects being delivered locally, and to a group of people that have not gone through automation to a huge degree. We talk about being able to have this infrastructure that seamlessly connects people, but it's really not true. We are still at a very basic level of functionality."

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