Stimulus: The Buck Starts Here

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Is the great stimulus frenzy over before it even began?

Sure, the American Recovery and Reinvestment Act's passage in January 2009 promised a boon of opportunity for the IT sector. But in recent weeks, as the stimulus money began to flow and VARs came to the realization that bags of cash weren't going to be raining from the sky, the excitement turned to skepticism. From many channel corners, reaction to stimulus has had a familiar ring: Curb your enthusiasm.

"Money is available, but it may be smaller than you expected, and it's going to be hard to get at. You're going to have to do some real digging," said Andrew Bartels, vice president and principal analyst at Forrester Research, during a general session presentation at Everything Channel's XChange Government Integrator conference this month.

So analysts aren't upbeat. And solution providers aren't exactly fanning the flames of stimulus excitement, either.

"It's a slow sell," said John O'Brien, director of financial solutions at Agilysys, a Boca Raton, Fla.-based solution provider. "A lot of the money has not yet been released, and the customer has not yet emotionally gotten to the point where they're moving forward. Stimulus isn't yet starting the conversation. But it is expanding the scope of the opportunity. What customers would otherwise defer for a year is now an option. That's what I've been seeing."

"Our challenge is wading through what is it going to take to get the money. The risk/reward factor, as it were," said Jay Kirby, chief sales officer at Troubadour, a Houston-based solution provider. "Is this investment worth the time and money if so much of it is going through traditional vehicles? Companies that feed off the government are in a great position. Minority-owned companies and companies with exemptions and statuses are in a great position. We have government customers, but are we going to be bathed in stimulus? I don't think so."

Mike Humke, vice president of public sector for Hewlett-Packard Co.'s Solution Partners Organization, has spent much of the spring in seminars urging VARs to not "lead with stimulus" so much as understand stimulus as one more dynamic of the public-sector business climate.

Denali Advanced Integration, Redmond, Wash., is keeping its ear to the ground in anticipation of possibly reaping some business spurred by the stimulus funding. Denali does a lot of work in the public sector and for health-care organizations -- two markets likely to see many IT projects funded through ARRA.

But so far Denali has yet to see any immediate opportunities generated by the stimulus package, said John Convery, executive vice president of vendor relations and marketing. He said solution providers are depending a great deal on their vendors to provide guidance on stimulus funding: Denali is a big HP channel partner and HP CEO Mark Hurd recently spoke to Denali customers and prospects, where he was peppered with questions about stimulus funding.

One approach Denali is taking is establishing relationships with companies with products and services most likely to win stimulus funding—think of them as the canaries in the stimulus-funding coal mine.

NEXT: Where The Money Is

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