Five Reasons VARs Love the Stimulus Package
VARs and the rest of the channel have a lot to gain from the economic stimulus bill signed into law by President Obama. Here are five of the most important reasons to support it.
President Barack Obama Tuesday signed a $787 billion economic stimulus package designed to boost the national economy out of a prolonged and worsening recession. The package contains a number of items that likely will benefit both channel partners and the IT industry as a whole.
The Computing Technology Industry Association (CompTIA), an industry trade organization, praised the measure as beneficial to VARs. The organization said that it would benefit the IT industry and IT workers despite some weaknesses.
"CompTIA hails Congress's economic recovery conference agreement," said Bob Kramer, CompTIA's vice president of public policy. "IT figures prominently in working to get jobs to Americans and lifting this nation out of its economic malaise."
Here are some of the specific items VARs and IT industry executives are likely to get excited about:
1. Digitizing Health Records The measure allocates $19 billion for modernizing health-care record-keeping and implementing health information technology (HIT) to lower costs and improve quality. This will surely bolster the entire health care vertical market, as medical professionals, hospitals, testing facilities, clinics and other healthcare providers face new mandates to make patient records more secure. New rules that establish how patient data will be shared and under what circumstances still must be established. However, doctors' practices will receive between $44,000 and $64,000 in incentives to computerize medical records, and hospitals get as much as $11 million each. That's a lot of money that will flow to solution providers with the right healthcare solution.
The measure also includes $2 billion for a National Coordinator of Health Care IT. Look for massively increased spending for storage, security and perhaps data virtualization as the government mandates a uniform, nationwide benchmark in health-care services and patient record keeping and compliance. VARs and ISVs active in the health-care market stand to reap huge rewards. "This cash infusion, aided by properly crafted HIT standards, will boost HIT uptake, which we trust will find its way to small practices, where the majority of Americans get their healthcare services," said Kramer.
2. National Broadband As in health care, the U.S. lags behind many other industrialized nations in its ability to deliver broadband services to the general population. The stimulus package contains $7 billion for broadband services, including $2.5 billion for the rollout of a national broadband network in under-served rural areas. With the promise of a national broadband policy finally in sight, the U.S. government will join the ranks of European and Asian nations such as France, Singapore, China and Japan in delivering easy access to the Internet. The establishment of such a network could trigger a barrage of new application development among VARs and lead to massive development of new mobile devices that can access the national network. It could also stimulate the private sector service providers to be more innovative in delivering their own broadband services.
3. IT Energy Efficiency The new bill allocates $20 billion in tax incentives for energy efficiency projects. There is $4.5 billion allocated for development of a smart electric grid. These funds and tax incentives will drive IT solution providers to work more closely with utility companies and energy providers to implement projects that provide utilities more control over the power grid and allow individual consumers to maintain more control over their energy use at specific time periods. There will be more smart-monitoring and remote control of household appliances and a greater need for wireless networks.
"These incentives will work to jumpstart an industry that, because of economic signals which frustrate robust green R&D, has not yet flourished," noted Kramer. "Hundreds of thousands of jobs will result as we learn to 'pro-sume' energy. Many of these will be in the IT industry supporting 'green' industries and reducing energy consumption."
4. More Government IT Spending VARs, system integrators and vendors on the government GSA schedule have cause to rejoice. There is more than $10 billion in the stimulus measure for government IT spending, including $2.5 billion for the National Science Foundation, $1 billion to the Census Bureau and $6.5 billion to the Department of Energy. That's a lot of computer hardware, software and services.
5. Benefits Extension Service workers, including IT service workers, received a two-year extension of training and unemployment benefits if they have been displaced by foreign competition. That should help the tens of thousands of U.S. workers dumped over the side by IT companies who have shipped their jobs overseas to reap higher profits. The Workforce Investment Act, a jobs training program, was also funded (although not modernized to better focus on IT skills needed in the new economy.)
(Al Senia is managing editor of ITChannelPlanet.com.)