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Economic stimulus package: Too many unknowns, say storage resellers

It'll take awhile for funds from Congress' economic stimulus package to work its way out to solution providers, and who the primary beneficiaries will be is still up in the air, resellers say.

As political analysts dissect the details of the $787 billion economic stimulus package signed by President Obama this week, storage solution providers are considering how the package might affect their business.

The consensus among resellers contacted by SearchStorageChannel.com is that the American Reinvestment and Recovery Act of 2009 is far too big and too new to make meaningful projections now about whether and how they will benefit from it.

"I'd love to see more transparency and a more definite idea of what the stimulus package is, what it will do to my business weekly or monthly," said Brian Casey, principal at solution provider Daymark Solutions Inc., in Littleton, Mass. "But I guess we won't know that until it is actually implemented."

More coverage on the economic stimulus package
Stimulus package for all VARs

Healthcare IT eyes medical record digitization hurdle
The economic stimulus act's provisions for digitizing the medical records of every person in the United States -- that project garnered $17.5 billion in the plan, and there's a few billion more for other IT initiatives related to IT -- stands to have the biggest benefit for storage VARs. The plan calls for electronic health records for each person in the United States by 2014 and integration of those records so that they can be shared among "health care providers, health plans, the government and other interested parties." The plan also specifies privacy guidelines for how those records are shared and includes provisions for the appointment of a chief privacy officer to advise on issues of privacy, security and data stewardship.

According to the act, the Department of Health and Human Services will establish a national coordinator who will be responsible for overseeing the development of a national health information technology infrastructure, reviewing standards, specifications and certifications and reporting back to the Secretary of Health and Human Services. The national coordinator is required to request any additional funding or authority needed within a year from the enactment date.

If the medical health records end up in a central database, resellers and observers say, the large VARs with existing federal contracts are much more likely to benefit from the stimulus package. "It all depends on what programs get put in place," said storage analyst Greg Schulz of the StorageIO Group. "If it's large-scale, typically it's the CSCs, the EDSes, the HP Directs, the IBM Directs who will benefit."

Smaller, regional VARs could see some of the federal money, the resellers say, because of the need to comply at a local level with federal regulations stemming from the economic stimulus package. "If a doctor's office needs to upgrade their system, they may need to go out to their local VARs," Schulz said. "There will be a trickle-down effect."

Beyond the issue of a central database, standardization is also an unknown. While the national coordinator will have oversight over standardization of records, what that standardization look like when executed will have a major impact on what needs customers present to storage solution providers. Bernard Westwood, CFO of Syscom Technologies in Marietta, Ga., said, "There needs to be a standard to make the initiative to make health records electronic effective. The government gets stuck in the details; there are a lot of things that go into it. It's easy to have a big picture, but the devil is in the details."

And, it's too soon for storage solution providers to take action with customers, said Schulz. "How do you get existing records linked to the new electronic health records system? Do you go ahead now and get that info in a digital form?" he said. "It's too soon to take action." But, he said, if health care customers have another initiative in their budget that can both help their bottom line and get their records online, it makes sense to pursue that. "If I can't link [electronic records] to another project, it's going to be back-burnered. Otherwise, what organization could spend money to speculate?"

Despite the lack of certainty around how whether and how soon money from the economic stimulus plan will make its way into the hands of storage resellers, that possibility holds hope for at least one reseller we spoke with. "I'd like to think [positive effects from the stimulus package will come] sooner rather than later, because obviously this market needs it," said Gavin Rosenberg, marketing director for Sunstar Company Inc. in Ingelwood, Calif. "There are a lot of VARs that are going out of a business and a lot that have already gone out of business."

Lauren Kelly contributed to this report.

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