Carriers could benefit from ‘trickle-down’ government stimulus awards

Many network operators are focused on obtaining a potential financial boost from broadband stimulus awards —but a new survey from the Computing Technology Industry Association suggests network operators also could benefit from a trickle-down effect as customers in the government market receive their own stimulus funding.

Three quarters of respondents at federal, state and local government organizations said they have already received or expect to receive funding for information technology purchases from the stimulus bill. And while much of that money will go toward hardware including computers, the survey also found increased interest in software-as-a-service and cloud computing, suggesting some of the new funding could be spent with network operators.

Stimulus funds could be a welcome relief to government agencies, which have experienced budget cuts that have minimized IT spending. The top five factors affecting the government’s ability to use technology, survey respondents said, were reduced budgets, lack of resources, outdated IT systems, a rapidly changing technology landscape and a lack of staff with the right skill sets.

These challenges, however, could make IT decision-makers at government organizations more willing to try operator-provided IT services designed to help minimize capital expenditures. Among respondents at the federal and state level, 69% said they intended to buy cloud-based services or would buy them if they received stimulus funds, CompTIA Vice President of Research Tim Herbert told Connected Planet. At the local level, that number was 54%.

Herbert cautioned that respondents tend to overestimate their plans to spend but added, “It’s a good indicator of priorities.” Sales force automation, processing power, and backup services are the sorts of cloud applications that will appeal to these organizations, CompTIA Herbert said.

This interest “ties back to the challenges we identified, including the need to become more efficient, enhance productivity and cut costs,” said Herbert.

Although the survey did not look at wide area connectivity, Herbert expects to see government agencies increase spending on those services to support new IT initiatives. “If you make the connection between the desire to use web-based services and applications, they will also probably look at the speed and reliability of their connections,” he said. “Especially at the local and state level, they need to modernize and upgrade.”

The web-based CompTIA survey was conducted during the fourth quarter of 2009 to a sample of 542 IT decision-makers and influencers employed in federal, state and local U.S. government organizations.