The Disaster Effect

Nobody wants to triumph from tragedy, but this season's destructive storms in the Gulf Coast do breed potential opportunity for contractors in the long term. Infrastructure was damaged, hardware destroyed and networks brought to their knees. But that's the long-term work. For now, agencies dig out, vendors mobilize products and smart integrators offer up services devoid of any immediate windfall.

No question, the hurricanes in the Gulf were devastating for state and local agencies, and education institutions.

"The government infrastructure for the state of Louisiana and, more specifically, the city of New Orleans, are fairly well-trashed," says Jim Krouse, state and local market analysis manager at Input, a Reston, Va.-based research firm. And while not as densely populated as New Orleans, areas of Texas and Mississippi also saw significant damage. "The computer operations in those states may pale in comparison to what can be found in states like Virginia, but nothing is nothing. They've got a lot of work cut out for them."

When the hurricanes first hit, vendors and integrators teamed to provide temporary IT centers in neighboring states, nearby hotels and even traveling recovery vans. Argyle, Texas-based Solid IT Networks, for example, provided wired and wireless access to Tulane University's network from Houston. Similarly, Lafayette, La.-based Global Data Systems (GDS) set up an IT center for the city of New Orleans at a Hyatt, enabling 11 basic rate interface (BRI) configurations that supported voice, data and video communications. It also set up a disaster-recovery location in Florida.

"We did a tremendous amount of temporary recovery," says Chris Vincent, senior vice president at GDS. "I had customers sneaking into New Orleans, grabbing AS/400 servers, and loading them onto some of our corporate aircraft to be flown down to Florida. It was bizarre, but you have sites that need to get up and running."

Holding Patterns

Now, months after the disaster, government agencies and institutions are trying to transition from the temporary locations to permanent ones. Initially, that means assessment and planning, and trying to determine where dollars will come from. And that leaves solution providers and integrators in a holding pattern.

"Yes, there are opportunities that will open, but it also delays a lot of business," Vincent says. "We were shipping half a million dollars of gear at a time. We'll ask when they can pay, and they'll say, 'We can't even cut you a check.' Thankfully, vendors realize that we haven't seen any margin."

State and local governments will carry much of the financial burden through matching arrangements for federal grants or by taking on project expenses on their own. In the education sector, the Universal Service Fund is redirecting $210 billion from the eRate program for education institutions affected by the hurricanes. The Department of Homeland Security has offered grants as well, though with a war eating up federal dollars, there's only so much to go around.

Regardless, don't expect the sexy implementations to come pouring in just yet.

"Whether federally funded or not, initiatives are not focused on new technology, not the latest and greatest," says Matt Harcourt, director of government and education at Juniper Networks. "They're just a way to get [agencies] back to where they were--or at least close to it."

Like GDS, Solid IT Networks hasn't billed for much of anything. A significant project with Louisiana State University is strictly back burner, says president Newt Newman, and other projects were scrapped. Newman is in the process of pulling from a warehouse old switches that Tulane traded in two years ago, in hopes that they'll at least enable online registration.

In that sense, the priorities are to first regain a functional infrastructure, then to provide the services people come to expect. "New technology is not being deployed. But if you remain patient and do the right things, you will always make money," Newman says.

What Now?

So, with little to tackle in the short term, solution providers are left to prepare for needs that will develop down the road. But what technology will state and local government seek specifically?

"What technology will really be focused on is a tough question, because [government officials] are probably scratching their heads about that themselves," Input's Krouse says. "I expect a lot of hardware spend in the beginning of the year. You'll also see a lot of consulting and disaster assessment."

Of course, solution providers can stay in the game by assisting agencies in assessment. In addition to providing equipment and implementation to New Orleans' data and converged-telephony systems, GDS is discussing ways that technology can fill gaps left behind from the layoff of 2,500 employees by enabling self-service information for citizens, for example. The company is also working with the public school system in analysis and recovery.

More ambitious still are plans by the state of Texas to expand a VoIP platform across all agencies. Three years ago, the state looked to Lake Forest, Ill.-based eLoyalty to build a converged voice and data network that would act as a 2-1-1 virtual call center for nonemergency needs. Following Hurricane Katrina, eLoyalty and state agencies expanded the capacity of that hotline to accommodate an unprecedented level of calls from evacuees.

"By virtue of it being a network-based solution for both voice and data, we were able to quickly and remarkably add capacity and users in a short time frame," says Steve Fox, vice president of eLoyalty's Contact Center Managed Services.

Recognizing that fact, Texas Governor Rick Perry released an updated homeland-security strategic plan that noted the 2-1-1 solution and plans to further enable the core VoIP technology. In addition to eLoyalty, which will continue as Texas' VoIP solution provider, the state extended an existing contract with the local telecommunications provider that was due to expire in August 2006.

"This is an infrastructure that can definitely be leveraged by agencies at multiple levels, beyond pure information transport," says Brian Kelly, the director of telecommunications in the Texas Department of Information Resources. "I'd like to say we did all this with great foresight, but the hurricanes showed us the value proposition associated with VoIP."

Across the board, hurricanes in the Gulf could accelerate the transition to wireless and mobility that's already happening across the country.

Once that happens, integrators will likely see the opportunity they've been waiting for. "The ability of local government to embrace high-end technology is not at the best place," Krouse says. "What you'll see from companies looking strategically is flexibility now to lay some foundation for opportunity later...to ensure they're along for the ride for the next two to three years."