IBM Eyes $122 Billion In Stimulus-Backed Tech Spending

Big Blue hopes government-funded projects will spur construction of physical assets that rely heavily on smart technologies and software.

Paul McDougall

February 9, 2009

3 Min Read
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1932's Emergency Relief & Construction Act, championed by President Herbert Hoover, envisioned workers fanning out across America to build roads, bridges, and other vital infrastructure in an effort to get the economy moving and end the Great Depression. Called into service were the unemployed, from lowly bricklayers to skilled engineers and architects, who were hired on by construction firms and other companies receiving funds under the bill.

President Barack Obama's proposed $800 billion-plus economic stimulus package would, similarly, fund a wave of new construction. Obama's program, however, could help revitalize a sector that hadn't even been born in Hoover's time -- the computer industry. Not only does the act, in its present form, provide direct funding for IT projects, such as a $400 million computing system for the Social Security Administration, it would also kick off numerous multimillion-dollar public-works efforts that, while heavy on bricks and mortar, would also include hefty doses of high tech.

"Our country must compete in a world that isn't just getting smaller and 'flatter,' but is also becoming smarter," IBM CEO Sam Palmisano recently wrote in a Wall Street Journal op-ed piece.

Indeed, unlike in the 1930s, the bridges, roadways, tunnels, dams, and other structures that could be built with today's stimulus funds will make heavy use of so-called smart chips -- embedded sensors that allow managers to stay atop maintenance, track usage patterns, and make operational changes on the fly -- and the software that's needed to make sense of the mountains of data they produce. Pricey consulting and integration services will also be required. All told, it's a boon waiting to happen for the IT industry.

Looking to position itself at the head of the pack for an opportunity that IDC says is worth $122 billion by 2012, IBM on Monday rolled out more than 10 new offerings designed to make it easier for businesses and governments to marry data culled from real-world physical infrastructure with the virtual infrastructures that inhabit corporate data centers.

"Infrastructure has always been how you stimulate business, but it's not just roads and bridges anymore," said Pete McCaffery, head of strategy for IBM's Systems and Technology group, in an interview. "It's roads and bridges coupled with IT."

IBM's new wares include the Service Management Industry Solutions package, which helps organizations build IT systems that can centrally manage internal and external infrastructures; new Tivoli Key Lifecycle Manager software, designed to automate and strengthen infrastructure security; and a new governance consulting practice that aims to help customers design systems that can help reduce risks related to changing business and market conditions, as well as shifts in the regulatory environment.

"It's about using IT to bring more intelligence and automation into the management of this expanded infrastructure," said McCaffery.

Also new is IBM's Systems Director software, which is designed to "bring order to the jumble of physical and virtual assets that characterize today's data center," the company said. IBM also unveiled upgrades to its XIV and DS8000 storage systems that are meant to enhance speed and security.

The new products and services, McCaffery said, should help businesses "retool their infrastructure for the 21st century." They could also make IBM one of the largest beneficiaries of the economic stimulus package.

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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

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