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Economic stimulus package to boost IT spending, systems resellers say

The $787 billion economic stimulus package won't directly benefit the channel, but VARs say it will lead to an increase in IT spending.

President Barack Obama's $787 billion economic stimulus package will not directly help solutions providers that focus on virtualization and the data center, but it will lead to an increase in IT spending that will benefit the channel, resellers said.

"Any infusion or change in the consumer's perception of the economy will get people spending again, generating a good turnaround in the marketplace," said Rand Morimoto, president of Convergent Computing in Oakland, Calif.

Francis Poeta, president of P and M Computers Inc. in Cliffside Park, N.J., agreed that the economic stimulus package will boost IT spending and bring new business to value-added resellers (VARs).

"Wiring schools and other initiatives the stimulus includes, it's all work that gets done by local VARs," Poeta said. "Why wouldn't it mean business for all of us?"

The economic stimulus package includes money to develop renewable energy, and VARs have seen manufacturers gravitating toward more green solutions lately, said Alan "Skip" Gould, president and CEO of BrightPlanIT Inc. in Buffalo, N.Y. Still, there is often a disconnect between facilities and IT, and it is possible resellers may not see any benefits, Gould said.

"Many times a person responsible for the power bill is more a facilities person than an IT person, and they don't know they can reduce energy with use of additional technology," he added.

Jack Kaiser, vice president of sales and marketing for International Computerware Inc. in Marlborough, Mass., is more hopeful that these environmentally friendly initiatives will spark revenue for the IT channel.

"Talk about data centers and renewable energy may encourage people to build greener, more efficient data centers and reduce power consumption," he said.

Kaiser is also confident that storage, virtualization and data centers will continue to generate revenue and profit whether or not the package caters to the IT channel.

"Regardless of the economy, people are still using email, Facebook and YouTube accounts, which are generating a lot of data storage," Kaiser said.

The stimulus package includes $11 billion to upgrade the nationwide transmission grid, which will help bring renewable energy from rural areas to cities and prevent outages. But Morimoto is skeptical the funding will reach resellers or have an immediate affect in the IT industry.

"If [the government] throws money into green energy companies, the question is, what will they invest in," Morimoto said. "If [the government] is spending $3 million to develop a better battery, you've got workers developing the battery, but that $3 million is not going to hit my desk anytime soon. Those workers are not going to be buying a computer or upgrading networks."

Healthcare is the only vertical that has IT spending directly spelled out in the economic stimulus package. Solutions providers in that field will see more money, while those in other areas will probably see a trickle-down effect, said Scott Millwood, CEO of Customer Effective Inc. in Greenville, S.C.

"We might see some impact from states that are running IT initiatives," Millwood said. "For example, a municipality in Florida [that Customer Effective] is working with is working on tracking vehicles in the city. So there might be some direct funding from them, but it seems like healthcare IT is basically the best area [to benefit from the economic stimulus package]."

To prepare for a potential influx of customer spending, VARs should talk to existing customers and prospects about what is going on in their businesses to see if they anticipate any benefits of the economic stimulus package, Millwood said.

No one can really prepare for what the stimulus package will bring, but VARs should "keep up on your skills, keep up with people working so your employees can keep jobs, and look for business," Poeta said.

And as long as the economic stimulus package generates jobs, he said, the IT channel will benefit from it. "The more people out there spending money, the better it will be for our clients, and the better it will be for us," he added.

Some resellers doubt the success of the economic stimulus package entirely, however. One Washington, D.C.-area solutions provider, who asked to remain anonymous because of his job position, said much of the proposed spending would have no real effect on the channel. Private companies could do a better job stimulating the economy, he said.

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