Feds end spending lull
- By John Moore, Michael Hardy
- Sep 15, 2003
The September buying season, the final splurge agencies make at the end of the budget year, has finally arrived.
Resellers and manufacturers report that business is booming, dispelling some initial uncertainty about government spending this year.
Many vendors had feared that the war in Iraq and the delay in appropriations at the beginning of the fiscal year would blunt the willingness and ability of agencies to spend money. The buying surge typically kicks off in July, but this year ordering didn't pick up until August.
"It kicked in a little bit later this year," said Alan Bechara, president and general manager of PC Mall Gov. "We started seeing the activity level increase in August," he said, noting that the buying trend has continued into September.
The war was a particular cause for concern, said Alan Lawrence, director of strategic programs at Hewlett-Packard Co. "It's taken typical computer money and put it in competition with weapons systems," he said. "We're tracking to our September forecast. There was a concern this year that a lot of that end-of-the-year money would not fall out, but it's coming to fruition."
HP typically sees anywhere from a 35 percent to 100 percent increase in September, he said. "A lot of that falls out in the last week of September."
HP officials planned for September with the assumption that the usual rush would occur, he said. "Even though there were a lot of uncertainties this year, we planned it as a normal year."
"The buying season this year was a little bit condensed," said Anne Brennan, government sales manager at D&H Distributing Co., a distributor that sells to federal resellers. Buying activity, Brennan said, "has started to flow through in the last two weeks."
Linda Allan, executive vice president of strategic programs at NCI Information Systems Inc., also noted the impact of the Iraq conflict. She said whatever year-end money remains in Defense Department budgets is going to support the troops in the field. Those dollars, under other circumstances, may have been spent on information technology commodity items but are probably gone, she said.
"When you look at the buying season that's happened this year, it's kind of been an odd one," said Jim Shanks, president of CDW Government Inc. "The federal budgets are out there, and if they don't spend them, they're going to lose them."
Although MPC Computers LLC is seeing fewer orders, they're larger in quantity, said vice president of sales Ron Clevenger. Agencies are responding to initiatives urging them to consolidate and make use of their bulk buying power, he said.
"This year seems to be even better than last year," Clevenger said. "My anticipation is that we will grow over last year's performance. The consolidation of requirements is the biggest change in the landscape over the last year. You're seeing opportunities aggregate themselves, and that certainly ups the stakes for every company out there."
The hot technologies revolve around wireless mobility. Company officials say that handheld devices, tablet PCs and wireless networking components are shipping by the truckload.
"There isn't a single discussion going on in government today where we're not talking about secure wireless communications," said Terri Allen, senior vice president of sales at GTSI Corp.
In addition to selling other vendors' products, the company has its own solution called GTSI Agility. Agility, a ruggedized wireless field office, fits into a carrying case and includes a variety of wireless connectivity features, such as satellite links and wireless local-area network capabilities.
The secure element is critical for wireless, said Raymond Bowen, president of reseller and services company Exceptional Software Strategies Inc. in Linthicum, Md. "Certain government agencies will not adopt [wireless fidelity] solutions because of security," he said.
"We're getting a lot of action in our wireless products, laptops and [handhelds]," Lawrence said. "Agencies are evaluating the ones with biometric capabilities. A lot of agencies are evaluating tablet PCs."
Tablets are a relatively new PC approach. They combine the power of a notebook computer with the ad hoc abilities of a palm-sized handheld device. Users can carry them like a clipboard, enter data by using a stylus, or plug them into a docking station and use them like desktop computers.
Portability is important for more conventional computers, too, Clevenger said.
"We did design an all-in-one PC for a government client earlier in the year, and we're seeing some interest in an all-in-one desktop," he said. "It's intriguing, particularly to the military, because it is easily deployable. It's easy to pack up into a crate and ship it." The all-in-one configuration means the computer can be set up without connecting cables for the peripherals, a significant time-saver for large or rushed deployments.
The recent spate of worms and viruses has created a new interest in Apple Computer Inc.'s products, Bechara said. Although Microsoft Corp.'s operating systems and software are the de facto federal standard, virus writers are more likely to attack Microsoft weaknesses than Apple products. "Security-minded customers have considered Apple more so than before," he said.
Ray Wagner, a research director in the Information Security Strategies Group of Gartner Inc., said he's not surprised that Apple is getting a closer look. Apple's smaller slice of the desktop market means it is less likely to be a target for virus writers, he said. Thus, organizations that operate mixed environments of Mac and Windows platforms are less vulnerable to attack.
"A different operating system that doesn't get attacked as much should [provide] some protection from a complete meltdown," Wagner said. He said a virus can be cross-platform in nature but added that such a scenario is unlikely in most cases.
"There's no question that heterogeneity makes for a more difficult attack" target, Wagner said. But he noted that some organizations may balk at the additional cost of maintaining different operating systems.
The Office of Management and Budget included support for Apple's MacIntosh OS X in its latest technical reference model for its federal enterprise architecture initiatives. The positive review gives agencies a green light to consider the system.
Companies have to plan to accommodate the year-end rush and usually extend their hours as the season grows busier.
"It is the most fun time here, the most energizing time," said GTSI's Allen. "We've got people working incredible hours. We go into 7-by-24 for the last couple of weeks."
Moore is a freelance writer based in Syracuse, N.Y.