State and Local Business Moves Front and Center

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By: Trish Williams

State and Local Business Moves Front and Center

Follow the money trail and you'll see why.

For the next 12 months, the state and local government market will bring an estimated $44.4 billion to information technology companies, according to the market research firm International Data Corp. in Framingham, Mass. Other market watchers are even more optimistic. Federal Sources, a McLean, Va., market research firm forecasts annual growth of 10 percent from current spending of $46 billion.

Either way, those numbers beat the $23 billion mark that industry watchers peg to the federal government market and that's stirring keen interest among IT executives across the nation.

This week's issue of Washington Technology offers a sweeping look at companies staking a claim to the emerging business in this exciting market and the political movers and shakers making those IT opportunities happen.

Take Pennsylvania's Gov. Tom Ridge, whose efforts to transform the Keystone State into a high-tech Heartland are detailed in a front page article by WT staff writer Dennis McCafferty.

As Ridge explains in an exclusive interview with Washington Technology, all the fancy Internet, intranets, two-way videos and high-speed lines don't mean a thing if they can't fit into the larger picture: One of delivering better services to citizens.

"There's a culture change that has to happen,'' Ridge says. "In order for us to advance ourselves technologically, we have to convince people that it fits a broader package. ... The state or states that most aggressively use the potential of information technology to improve delivery of services will be the states that lead the pack in economic development and education.''

With more freedom than their federal counterparts to launch groundbreaking initiatives, officials from Pennsylvania and other states, including New Jersey, Utah and Nebraska, are shaking the business-as-usual mindset when it comes to information technology projects.

A major challenge facing Utah, and one propelling its information technology push, is the need to develop the infrastructure to support the 2002 Winter Olympics, slated for Salt Lake City.

As John Makulowich notes in his article on page 24, part of the speed with which Utah has moved into the electronic age is accounted for by its large Mormon population, which strongly encourages learning. Utah officials boast that the state has a higher than national average penetration of PCs in the home, yet a lower than average incidence of cable television. Further, educated populations usually demand more government services delivered electronically, which matches the public sector effort to distribute information more efficiently and presumably at lower cost, they say.

Not to be outdone, state leaders in New Jersey and Nebraska are planning far-reaching information technology efforts of their own. A pair of stories in the State and Local Markets Report beginning on page 22 showcases their no-nonsense approach to ushering in technology-assisted productivity improvements.

Among New Jersey's more innovative projects are the automation of inmate parole records by the New Jersey State Parole Board; a voter registration system that allows constituents to register at state agencies while conducting business there; and a computer-assisted dispatch system for state police. It's all part of a grand plan started just over two years ago by Gov. Christine Todd Whitman and her private/public partnership commission known as Prosperity New Jersey. Whitman's goal is no less than to move New Jersey to "the forefront of the national and international economies."

Nebraska officials have been given credit in recent years for understanding both when and where large-scale information technology initiatives are going to work. Nebraska is known for a host of innovative and sometimes off-beat solutions to problems that states across the country are facing. For instance, the state gained national attention for using a cigarette tax to fund information technology.

Check out our front page story by Neil Munro on an imminent contractual effort planned by California known as the Joint Venture Partnership Project. Chased by rival consortiums led by IBM Corp., Ericsson Inc. and GTE Corp., this effort may ultimately enable companies to sell a wide range of products and services to the state's 23 universities, 109 community colleges and almost 2 million students.

Beyond the cutting-edge states are the changing corporate snapshots. Take Tech Data Corp., a large technology distributor on the state and local move. Last year, state and local government business accounted for 30 percent of the total government market, its government sales vice president tells Washington Technology. Now, state and local business accounts for half of the government sales picture for the Clearwater, Fla.-based company.

If all this whets your appetite, a must-read is our regular state and local section, which features bi-weekly coverage of the key players and the strategies they are using to bust open this market. Read about state and local government efforts to overhaul entire database systems involving welfare, Medicaid, transportation and justice, outsourcing integration work.

There's our Eye on the States column, which analyzes trends, policies and programs written by Tom Davies, who consults on the state and local information technology marketplace for Federal Sources. And next issue, don't miss Davies' regular State of the $tates column for a snapshot of state and local government infotech contract awards and coming opportunities.

Smart companies must closely track federal grants and determine how to leverage their sales, marketing, business development and strategic alliances across all levels of government. Our readers can learn about potential teaming partners who are adapting to the changing government marketplace.

So what's it all mean? Both state and local government officials and industry managers' efforts and solutions mirror a fresh approach to the challenges of governing in the electronic age.

We'll make it our business to keep you abreast of the eye-opening results and robust returns on investment that are turning heads at all government levels. We look forward to providing you insightful coverage of the vast opportunities in this exciting marketplace.

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