Hints of a Tech Gold Mine in the Stimulus Package - Bits Blog - NYTimes.com

Hints of a Tech Gold Mine in the Stimulus Package - Bits Blog - NYTimes.com

Hints of a Tech Gold Mine in the Stimulus Package

By Steve Lohr

The headline technology winners in the government’s economic stimulus package have been electronic health records and smart grids, where computing is front and center. Many billions have been pledged to these obviously high-tech fields.

Yet a far larger flow of money into information technology may eventually come from state and local governments as part of a vast array of stimulus-package investment projects, according to Joaquin Gonzalez, director of research for CivicUS, which advises state and local governments.

Mr. Gonzalez estimates that between $250 billion and $300 billion of the stimulus funding is targeted for state and local government projects intended to modernize and improve the efficiency of public services. This is not money, he says, to plug budget gaps, but for investments designed to make local government work smarter. In doing so, Mr. Gonzalez calculates, as much as one-third of that total will be spent on information technology projects, often involving the Web, to streamline and improve the delivery of public services and information to citizens.

The stimulus legislation, the American Recovery and Reinvestment Act, also calls for detailed reporting and tracking of the federal funds that will be handed out. Many companies, large and small, are rushing to offer project-monitoring software for state and local governments. In a research note this week, CivicUS surveyed the vendors’ scramble. The offerings come from the biggest companies, like Microsoft’s Stimulus360 and I.B.M.’s Economic Recovery Fund Tracking, and from smaller suppliers, like Acumen’s Stimulus Tracking and Recipient Transparency, or START.

These software “dashboards” for tracking projects are strategic products, especially for the big companies. The state and local government market for information technology is scattered and difficult to crack. By selling the dashboard software, the big companies are trying to get a foot in the door, Mr. Gonzalez said, and potentially a head start in grabbing a share of the expected surge in stimulus-funded technology spending.

In its report, CivicUS surveys other suppliers including MicroStrategy, CGI, Visible Strategies and Onvia. And state and local governments, the research firm says, should look to software to help them do three things: support reporting to the federal government, share information with citizens on the progress and benefits of projects, and manage the projects themselves.

The demand for project tracking technology, fueled by the stimulus package, extends beyond the companies cited in the CivicUS research note. A startup in San Francisco, Innotas, which offers Web-based technology-project software, has seen the effect. “The biggest growth area for us is state and local government,” observed Keith Carlson, chief executive of Innotas.