President-elect Barack Obama has an aggressive plan to rebuild America’s infrastructure, from improving highways to making ubiquitous the 21st century classroom. This is good news for all, but solution providers who have dealings in the government channel may be the ones benefiting the most.
According to a recent report by market research firm Onvia, major projects will dot the 2009 landscape in construction of roads and bridges, 21st-century school projects, health care IT and modernization of energy-inefficient government facilities. That’s good news for solution providers who work in the health care, education and government sectors.
“In the public sector IT solution provider segment, the word stimulus itself is typically bullish – [to mean] more spending on information technology solutions,” said Rick Marcotte, president and CEO of DLT Solutions. “(Obama’s) stated positions tend to signal the increased use of technology as a policy enabler, [including a] cabinet-level CTO position, cybersecurity czar and increased use of healthcare IT. All of these have positive implications for the IT solution provider space.”
The report, Onvia’s 2009 Government Market Outlook, is the result of conversations with 4,000 government executives, managers and purchasing officials at state, local and educational purchasing offices. It noted that the proposed economic stimulus package is driving the majority of the spending.
“Rebuilding the nation's transportation systems along with investments in technology will spearhead spending priorities for government agencies as they continue with modernization plans,” said Michael Balsam, chief solutions officer at Onvia, in a statement. “Even with unclear economic indicators, government at all levels will continue to spend on essential services and invest in the future at cautious but still substantial levels, and this presents many opportunities in what will be a highly competitive landscape for companies that want to secure government contracts.”
At the federal level, Onvia reports that 20 percent of officials surveyed believe federal spending will increase in 2009, while 25 percent expect spending to stay the same as 2008. However, 55 percent believe there will be a decrease in spending in 2009. In contrast, the report found that as a result of the proposed economic stimulus plan, government leaders increased their 2009 projections and now 80 percent expect to spend the same or more on hardware, software, services and telecommunications, compared with less than 65 percent before the package proposal.
On the education front, respondents were optimistic, with 57 percent reporting they plan to maintain or increase spending this year. Of that, 74 percent expect to maintain or increase the amount of technology they purchase – good news for solution providers who work in the K-12 education market.
Green initiatives also will be an important consideration under Obama’s plan. Last year, green initiatives such as energy efficiency climbed 25 percent over 2007 as agencies pushed to modernize and reduce operating expenses, and will continue as government entities work to adapt aging buildings to meet current standards, according to the report.
“Obama has indicated an increased investment profile for infrastructure projects, energy-efficient buildings, information sharing and accountability of spending. For technologies that facilitate those areas, there is a strong opportunity for the proven and experienced solution providers,” Marcotte said.
Onvia’s 2009 Government Market Outlook report is available for free download at www.Onvia.com/2009outlook.
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