Baseline Magazine - January/February 2009

PRESIDENT BARACK OBAMA’S OFFICIAL CAMPAIGN WEB SITE IS A MODEL

of how 21st century technology tools can boost a candidate’s popularity, building

significant buzz via blogs, IM applications and e-merchandising. And Obama’s

campaign wasn’t confined to his own site either, because he chose to expand his

presence on social networking sites like Facebook, MySpace, Eons and BlackPlanet. His images

and words also constantly popped up at outlets such as Flickr, Digg and You Tube.

All these efforts made Obama an accessible, immediate and appealing figure to both younger voters and older ones who regularly connect to the Internet. Ultimately, they energized his campaign and helped secure a decisive victory for the nation’s first African-American president.

Certainly, Obama enters the White House with a reputation as one of the most—if not the most—tech-savvy chief executives ever. For starters, he’s created the position of a federal chief technology officer to oversee the future of information technology for government agencies.

But how will his administration affect IT spending in the trenches—where technology purchase decision makers in midsize and large organizations must deal with strapped budgets and a shaky economic environment?

Baseline

recently spoke with experts and executives who are on the front lines in dealing with the new administration’s impact on IT spending. Here’s what they had to say:

Here’s the good news/bad news scenario. IT purchase decision makers can find both heartening and disheartening news in a recent forecast from INPUT, a Reston, Va.-based market research firm. The good news: Obama’s economic recovery plan will seek to open up the credit market by broadening deposit assurances for banks and guaranteeing loans. The bad news: Obama’s projected policies could have the effect of adding 281 billion to the federal deficit, INPUT reports, and he’ll seek to close corporate tax loopholes.

“There will still be opportunities to spend on IT in 2009 and beyond,” says Deniece Peterson, a principal analyst with INPUT. “But that spending will need to be much more focused and tied to enabling priorities. Money will be tighter, and there will be more gates to cross in the decision-making process. Those trying to justify a major IT purchase will be asked more than ever what the impact of the purchase will be and how it ties into the overall mission. What are the short-term and long-term effects of buying or not buying it?”

In other words, it will all come down to figuring out which technologies are considered must-haves. Those defined as nice to have rather than must-haves—such as Web 2.0—may see a potential dip in demand.

All eyes are on security and privacy. IT security obviously remains a high-profile area of concern. The Commission on Cybersecurity for the 44th Presidency, a bipartisan effort on the part of computer security experts, has recommended that Obama set up a high-level post to increase IT security and counter cybercrime, citing intrusions within the computer systems at the Departments of Defense, State, Homeland Security and Commerce.

With the White House and Congress dominated by the
Democratic party, privacy is emerging as an equally promi-
nent issue. In a recent survey
of industry executive members
of the Washington, D.C.-based
Centre for Information Policy
Leadership, 90.9 percent pre-
dicted that an Obama admin-
istration would address issues
of privacy and information
security. More than seven in 10
members believe Congress will
enact major privacy legislation,
and more than six in 10 feel a
better approach is needed to
enhance the privacy and secu-
rity of personal information.
Will IT jobs stay here?

Another IT area in which the new administration could have an impact would be by increasing barriers to the offshoring of IT and other services. Obama’s campaign promises included ending tax breaks for firms that move jobs out of the country and awarding tax credits to firms that increase their ratio of U.S. to non-U.S. employees, notes Sean O’Dowd, senior analyst at Financial Insights, a market research company owned by Framingham, Mass.-based IDC.

Still, any meaningful change in this area will take years, not months, even if Obama moves quickly. “You won’t see an immediate spike,” O’Dowd says. “You’ll see more of a slow progression. If the economy continues in a downward slide for the first year of the new administration, companies will be too involved with cost-cutting to put too much focus on this. Besides, if the economy remains in trouble, Obama will have far more critical issues to focus on than outsourcing.”

Adding more green to IT. Information technology investments that reduce energy should also get a boost in the new administration, as Obama’s New Energy for America will seek a 150 billion investment over 10 years to encourage development of technologies that reduce energy.