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Big Blue's decision to seed technology purchases connected with the economic stimulus package is loaded with potential-- though the operative word here is potential.
The $2 billion in financing that IBM will provide for technology purchases associated with the American Recovery and Reinvestment Act, signed by
President Obama in February, may not seem like a lot. But the company is really just priming the pump.
After all, the legislation provides $111 billion in spending on infrastructure and science, $59 billion on health care, and $43 billion on energy, the three areas in which IBM is offering to finance technology purchases, and that money will be spent in the form of grants.
Just how much technology will be involved? Consultancy IDC estimates that the spending will generate $101 billion in investments in technology associated with those areas during the next five years. In energy, IDC expects the government grants to generate some $78 billion in investment in technology designed to improve the nation's electricity transmission grid and to develop renewable energy sources.
In health care, IDC sees another $21 billion in spending, primarily to create an electronic database from what are now paper records. And in infrastructure and science, the consulting firm predicts that the federal government itself will spend approximately $2.5 billion on computer systems to track expenditures in this area.
What's more, IDC consultant Meredith Whalen said those estimates are conservative. Only in energy does IDC see a multiplier effect, says Whalen, noting that the $23 billion that the legislation singles out for renewable energy is likely to yield $66 billion in tech spending.
Of course, these are merely projections. The federal government has yet to offer any specifics on how and when the grants will be provided. And IBM spokesman Fred Clarke turned down a request by CIOZone to interview a client about technology it would need for projects likely to benefit from the funding.
But Clarke added that IBM's sales team is already working on deals with more than 50 customers involved in developing the so-called "smart" grid alone. Two billion dollars divided by 50 would be $40 million each. And given the financial crisis, where else would a company get that much for a single piece of R&D?
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