"These are companies that are changing or transforming markets, much as Cisco did in the network router industry (in the late 1980s)," says Cynthia Ringo, a partner at venture-capital firm DBL Investors.
•Health care. Obama is advocating providing up to $59 billion in federal funding for health care — about $20 billion for electronic medical records.
Funding is intended to hasten digitization of patient medical data and prescriptions. Electronic health records and e-prescriptions are coveted by health care experts because they can quickly be shared online by hospitals, doctors and patients, and they displace error-prone paper files.
The benefits don't end there. Bill Vass, president and COO at Sun Microsystems Federal, predicts a reduction in fraud and waste, better on-site care for victims of disasters, and establishment of computer networks at underserved health clinics.
The scope of projects can vary, from a contract to help a physician install an electronic health record in an office (estimated cost: thousands of dollars) to hosting a nationwide health information exchange (estimated cost: millions of dollars). IT companies will be responsible for installing and maintaining systems that allow the exchange of electronic records. Some funds will go to doctors as a financial incentive to digitize records.
Tom Romeo, IBM's vice president of federal government, foresees a day soon when medical data are easily exchanged like traffic on a cellphone network. Last month, it unfurled an electronic records exchange system for granting disabilities benefits for millions of Americans. Some 200,000-plus jobs could be created with proper investment in health care projects, Romeo says.
Siemens Healthcare has invested heavily in a state-of-the-art electronic medical-records system called Soarian that lets hospitals in Ohio, Massachusetts, Pennsylvania and elsewhere transparently share patient data such as EKGs, brain scans and MRIs, and intuitively make medical decisions based on predefined best practices of physicians. It has also significantly reduced the chances of incorrect prescriptions. Siemans believes it is in an advantageous spot to land federal deals, says Luis Castillo, a senior vice president.
The winners take all?
At the core of the competition for federal dollars is a fundamental shift in how some of the biggest tech companies do business.
IBM, Intel and Cisco are expanding their roles in digitizing key pieces of infrastructure, from "smart" electric utilities to electronic medical records.
IBM, which for decades was synonymous with burly computers, has rebounded from a major restructuring in the 1990s and remade itself. Since 2000, it has scooped up 100 companies, sold its PC business and other low-margin hardware businesses, and pumped its annual R&D investments to $6.3 billion.
Cisco has moved beyond its core computer networking gear. Last month, it said it would start selling computer servers for the first time in pursuit of money that big organizations spend on "data centers" that run their computing operations.
For them and others, the stimulus is a once-in-decades opportunity to make fundamental changes to the nation's infrastructure, says Ken Dulaney, an analyst at researcher Gartner.
"These companies always have their eyes on the future," says Rep. Anna Eshoo, D-Calif., whose district includes Silicon Valley. "They are willing to take risks. If they don't, they won't last."