A £220m cash injection into the public sector to help local authorities meet e-government targets is set to filter down to the channel, but many resellers will miss out if they are not already geared up for public sector work.
The Office of the Deputy Prime Minister has revealed plans to provide £220m to help local authorities get their services online by 2005.
Resellers, with their local contacts, are ideally placed to win local authority contracts, said John Griffiths, public sector consultant at reseller cScape. But winning these deals requires VARs to have experience of dealing with the public sector.
"You're not just going to walk into the sector and take away deals just because there's extra money available," he said.
Some VARs have been put off bidding for local authority contracts because of the high price of entering the market.
According to the Federation of Small Businesses (FSB), it can cost up to £500 in annual fees to become an accredited supplier to a council.
Tina Sommer, trade and industry chairwoman at the FSB, said: "Approved lists, excessive paperwork and a raft of different entry requirements puts another layer of bureaucracy and cost between councils and small firms."
The government has tried to make it simple for smaller businesses to win government contracts through the G-Cat system.
But not all local authorities will buy through G-Cat, said Glyn Evans, a representative for public sector IT group Socitm.
"Some use their in-house procurement specialists for IT purchases," he said.
But Griffiths warned that this round of public sector spending may not last. Once the 2005 targets have passed, local authority spending will return to "more sensible" levels, he said.
"If you're looking at winning public sector deals, you have to consider your plans for the next three to five years and think about how the market will look over that time."
Central government spending on IT is also likely to fall after the next general election. Anthony Miller, analyst at Ovum Holway, said most of the IT infrastructure work will have been done and spending would be on lower-value maintenance contracts.
"I don't think the political willpower will be there to continue current spending levels on IT, whoever wins," he said.
Infrastructure provider says international sales now make up 51 per cent of its revenue
Suzanne Chappell of TMS plans sailing venture after selling Oxfordshire-based TMS to acquisitive Chess
Withdrawal of credit insurance by some providers a 'reflection' of current challenge facing IT sector, according to MD Steve Soper
SMART's UK managing director joins Lenovo to boost SMB business