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Commentary

How The Stimulus Bill Supports Enterprise IT

The American Recovery and Reinvestment Act, passed by the House last week, will probably sail through the Senate in the next week or so and get to the president's desk for signing by mid-February, despite the political theater to which we're likely to be treated over the next 15 days.
The American Recovery and Reinvestment Act, passed by the House last week, will probably sail through the Senate in the next week or so and get to the president's desk for signing by mid-February, despite the political theater to which we're likely to be treated over the next 15 days.Pundits will argue its merits from the sidelines, but it's already becoming clear that information technology companies are going to emerge as early winners, and even politically-oriented bloggers are parsing such techie aspects as the broadband provisions of the bill.

A quick search for the term "Information Technology" within H.R 1 of the 111th Congress shows that the federal government will spend at least $7.6 billion on upgrading its own IT infrastructure in such areas as the Farm Services Agency, the National Institutes of Health, and the Office of the Aging.

That's just a drop in the bucket, of course, but it illustrates how the Obama administration and congressional Democrats will use tax dollars to upgrade the nation's IT infrastructure. If you're curious, scroll down to the section called, "TITLE IV--HEALTH INFORMATION TECHNOLOGY," also known as the "Health Information Technology for Economic and Clinical Health Act" or the "HITECH Act."

The worst nightmare of conservatives, it spells out a hugely ambitious program for promoting health care IT without nailing down its cost. But it gives you an idea of how seriously President Obama and House Democrats are taking health IT.

This is just one area where Washington is going to directly impact IT; according to the New York Times, the House bill also contains "$6 billion for broadband service, the digital equivalent of Lyndon B. Johnson electrifying the Hill Country in Texas."

This spending is obviously a boon to telecom and cable companies, one that critics contend they don't really need. According to the New York Times, Verizon Communications stands to gain $1.6 billion in tax credits under the Senate version of the bill, even if it doesn't hire a single extra worker.

Be that as it may, government has often played a significant role in boosting information technology industries. Without getting into debates about the role of free markets and private enterprise, it's a matter of history that President Bill Clinton made IT a cornerstone of his economic stimulus plans in the early 1990s.

More recently, the Sarbanes-Oxley Act of 2002 provided a new market for certain kinds of software vendors, and it's no coincidence that one of the few software companies not called IBM to have had a decent fourth quarter of 2008 was enterprise search specialist Autonomy.

The White House also has launched a new Web site that will allow normal people to see how the federal government will be spending their tax dollars in the name of economic stimulus.

If you're an IT company, it's not too late to start working on products that will serve likely beneficiaries of federal largesse, notably the health care, energy, and communications industries.

If you're an IT consumer, you also might start looking for tax credits you can earn your company by implementing technologies that support some of the new administration's broader aims, including virtualization and enterprise mobility (energy savings and wireless broadband respectively).

Any other ideas on how to leverage the new administration's ambitions to help your organization? I'm sure your fellow readers would love to benefit from your insights, so feel free to comment below.