Resellers, Solution Providers Target Economic Stimulus Package

By Jessica Davis  |  Print this article Print

Many reseller solution providers are anticipating the impact of economic stimulus package funds, but Gartner says the fund flow will likely be delayed until the end of 2009. Still, health care, utilities, education and government sectors are "pockets of opportunity" this year.

Resellers and solution provider channel partners agree that business conditions out there are tough these days, but there’s a new sense of optimism now among both VARs and vendors that funds from the economic stimulus package will get things moving again.

In particular, vertical sectors such as utilities, health care, education and government are expected to lead the growth this year during the economic slowdown, according to Tiffani Bova, a vice president at Gartner working on channel marketing and strategies. Gartner recently revised its forecast for 2009 downward, again, after "Q1 of this year was significantly less than what we thought it would be." Bova recently addressed resellers and solution providers at the Ingram Micro VTN invitational conference in Orlando, Fla.

Some of these verticals are anticipating the stimulus package funds, since they have not yet been made available. Indeed, most people are still looking for answers about where the funds will come from and how end customers can go about getting them.

"I want to know who signs the check," one solution provider audience member asked Bova during the question-and-answer period following her presentation. No one knew the answer. But another audience member, talking about an HP and VMware proposal submitted to a medical group client, said he thought that client would balk at the price. But the client didn’t blink because that client said it was expecting $44,000 per doctor in stimulus funds.

Still, Bova says that the impact of the stimulus funds is not expected to hit until 2009 or 2010, simply because the logistics of distributing them have not yet been sorted out. However, she advised technology resellers to start doing unsolicited bids.

"If you aren’t in these segments that are getting the funds, get in there," she says. "You need to be very active in 2009 with them to be part of the spend in 2010."

However, executives at Juniper Networks attending the Ingram Micro event advised against chasing stimulus funds if they aren’t earmarked for customers you already target.

"The ones who chase it have to realize that it’s going to be very competitive," says Blaine Raddon, vice president of channels at Juniper. "Those who already have a practice in that space will have the first mover advantage."

Bova says that in health care alone $17 billion has been earmarked for incentive payments to physicians and hospitals to implement electronic medical records, $2 billion has been dedicated in grants and loans for health care IT interoperability, and $12 billion has been allocated for broadband and facility construction for telemedicine.

In the private sector, funds are tighter, so the opportunities in 2009 will be won by those who can help clients "do more with less."  Bova recommends taking a consultative approach to clients, helping them reduce the costs of their day-to-day IT expenses in order to free up funding for other IT project spending.

"Between 2002 and 2009 the amount spent on just running IT is virtually unchanged, but technology has changed drastically since then," she says. Bova believes solution providers can exploit that technology to reduce day-to-day IT costs for clients.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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