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Partners to see stimulus package benefits, but not without challenges

Rivka Gewirtz Little
The political wrangling is over, and the nation has a stimulus plan with plenty of new business potential for networking VARs. But to benefit from the plan, solution providers will have to learn how to track the money and hustle to be in the right place with the right technology.

Networking VARs will find opportunities to do business in education, healthcare and the modernization of the electricity grid, among other sectors.

The breakdown includes $120 billion for infrastructure and science, with a $7.2 billion line item for building out broadband for underserved communities. Then there's $20 billion in incentives for healthcare providers to automate their records systems. The healthcare fund also includes $1.2 billion for VA hospital improvements and medical facility construction, which will include network build-out.

Beyond automating healthcare records and X-rays, the healthcare IT fund will aim to provide better video for telemedicine and to beef up transmission and security for medical data.

"We're seeing some hospitals replacing their networking and trying to meet federal standards around transmission of X-rays," said Don Wisdom, president of

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Datalink Networks, a solution provider in Santa Clarita, Calif. "They have to store them in a certain digital standard picture-archiving system."

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Modernization X-rays and records also means network upgrades.

"There's a lot of work in getting all those paper files electronically enabled. And there will be the building of pipes to move this stuff around, as well as the process of building applications to move those documents." said Bob Laclede, Ingram Micro's vice president of GovEd sales. "Once you digitalize records and X-rays [and produce patient video], the storage that spins off that is monstrous."

There will also be a push to make these networks video-ready for telemedicine.

"Rural healthcare is going to play a big part here. A rural clinic will have to transmit all that data to some specialist in Boston [for example]," Laclede said.

And when it comes to healthcare, network monitoring and security and compliance needs are crucial for data transmission.

"We're ramping up our assessment capabilities so we can do those assessments. We will do specific assessments that are defined by the industry, like for HIPAA [Health Insurance Portability and Accountability Act] and PCI compliance," said Robert Olwig, vice president of business strategies at solution provider and Cisco partner World Wide Technology in St. Louis. "Every healthcare organization needs to do the [assessment] related to PCI once a quarter to scan their network as it relates to credit card transactions."

On the education front, Congress has earmarked $53.6 billion for classroom modernization and prevention of cutbacks. That modernization is likely to result in wireless classrooms as well as collaborative technologies that will enable teachers statewide to share curriculum.

Partners have been deploying wireless LANs in schools all over the country for years, but that's now expected to ramp up even further.

"Wireless is a trend we've seen a lot of activity around in schools," Olwig said. "Hospitals also want to take advantage of this for tracking equipment."

Physical security in education will also receive funding, he said.

"There is a lot of emphasis around physical security for emergency response if something occurs at a school campus. Unfortunately, there have been tragic incidents where we didn't respond as well. Video surveillance can help make campuses safer," Olwig said.

Much of the new stimulus-bill money will go to schools through grant programs like the federally funded E-Rate program, which runs through the FCC and provides money for technology in schools and libraries.

Finally, networking VARs will see money from the government's commitment of $11 billion to update the nation's electricity grid by hooking it up to the Internet.

"Partners need to get on top of how we start working in energy if we are going to build a smart grid. This means selling technology and services," said IDC analyst Christina Richmond.

How to find the stimulus money

Even if partners are primed to offer these technologies, they must first figure out how to "follow the money trail," Laclede said.

"The first step is identifying where those grants are," he said. "The second piece is helping the solution provider come up with a solution and apply for things."

Ingram currently uses a Web-based subscription service that tracks government, healthcare and education grants. Using that information, Ingram partners can be prepared to bid on these contracts.

Avnet uses an eight-database tool to track these grants, and the distributor makes the information directly available as a tool for solution providers.

"If you want to know what the department of energy is going to spend on a particular product, when they are going to spend it, and whether there will be an RFP, [the tool] will tell you," said Mike AtLee, national director of the Government and Education Solutions group at Avnet Technology Solutions Americas.

Government, healthcare accounts require specialization

But AtLee stressed that government accounts -- especially federal ones -- are not a business that VARs want to just "put their toe in." VARs must meet stringent requirements and the contracts can take months to gain.

"You either make the commitment or you don't," he said.

Avnet's existing government and healthcare partners have been through mini "universities" or training programs in the SolutionsPath program. The program includes the GovPath and HealthPath tracks, which offer intensive training in understanding the inner workings and language of each field.

In the HealthPath program, for example, partners spend a week in a hospital, literally wearing scrubs and observing everything from surgery to administrative offices in order to better understand the needs of the healthcare setting.

"Then, when you walk into a hospital environment, you've walked in their shoes, understand their needs, and speak their language," AtLee said.

But now that the stimulus bill is passed, what happens to those partners that are not already set up in government vehicle contracts or trained to understand the grant process?

"We're seeing partnerships being formed," said IDC's Richmond. Partners that already have government contracts will look to partners with other solution providers that might, for example, offer physical security or another technology that they don't offer. Then, both benefit, she said.

In many cases, AtLee said, the government wants 40% of contracts to go to minority-owned businesses or to veteran-owned companies. Avnet will reach out to these businesses and connect them with a larger company that might hold a government contract but not be minority-owned.

"We look to connect the dots and spread the wealth," AtLee said.

Grant eligibility isn't as strict in education. Schools on the local and state level don't have quite as many requirements or take as much time.

"They don't always require that the schools go out and get more than one design or supplier," Wisdom said.

Making the customer stimulus-package-ready

Other partners will need to educate their own clients on how to apply for stimulus grants. Then they will be in a position to serve as their VARs on these projects.

"There may be a new bureaucracy that we are all going to need to learn … and we will have to help customers learn about it. Then we can help facilitate them getting that money so they can take advantage of it," said Glenn Conley, CEO of Metropark Communications, a solution provider in St. Louis.

Retooling for stimulus-related projects may be difficult for many VARs. The hard work will be a key factor in stabilizing their business during rough times.

"I don't know that we will see business going up 50%, but it could help us stay alive," Laclede said. "If we can keep existing revenue rates stable because of this, that will be a success for us."


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