Many tech companies are eyeing the fat budgets of the Department of Homeland Security. But Andrew Gordon finds that they must first learn to communicate in that spaceThe light at the end of the tech downturn tunnel isn't being held by Carly Fiorina, John Chambers, or Michael Dell. Leading the way out is Uncle Sam. Federal-government agencies will spend $6 billion on IT security by 2008, according to a new study from market-research firm Input. While the consumer and enterprise sectors continue to crawl along toward recovery, Input predicts spending on IT security will continue to increase, leading many tech companies great and small to flock to the government sector. "We are seeing a number of companies who see the Department of Homeland Security's substantial funding, so they decide one day to be government contractors," says Larry Allen, EVP of the Coalition for Government Procurement. "By the next Friday, they get frustrated and call their local representative to complain. We're seeing a lot of smaller companies who think this will be their ticket to the big time. But doing business with the government is like any other market. You have to know the language and the characteristics, and that takes time." In other words, the government is no quick way to buoy the bottom line while waiting for the consumer or enterprise markets to recover. Getting in touch with governments The government sector has always been a source of hi-tech innovation and spending, explains Megan Lamb, president of The Merritt Group, but during the dot-com boom, it became secondary. Now that the bubble has popped and the grass is greener in the government's yard, many hi-tech companies are learning how to connect with and talk to the government. "Most companies have wanted to get into the government sector," says Ben Merritt, CEO of The Merritt Group. "But now there's a renewed focus, and they're putting in more energy and resources. I'm seeing more companies really putting in the time to understand this market." "The government market has always been counter-cyclical," adds O'Keeffe & Company founder Steve O'Keeffe. "If the consumer market is booming, no one cares about the government. The commercial marketplace will grow more quickly than others, but the government market is much more stable and steady. After September 11, this became a strategic market, as many companies realized that homeland security will touch every part of our lives." Gateway, better known for selling PCs to consumers, is one company hoping to take advantage of that influx of money. The company wants to sell the government a set of services, from IT installation to recycling, not just PCs. But Ted Ladd, senior manager of PR for Gateway's b-to-b division, recognizes that the company is not well known for its government work. "Our brand position is about comfort, and we want to carry that over," says Ladd. "If you are overburdened and confused, we are there for you. We just don't leave after selling you a computer. We want to show we have a lot to offer the government market. But it's more an awareness problem with the media, that what we do in the consumer space we can also do in the government space." Schwartz Communications, which is working with Gateway, also recognizes the value of pursuing state- and local-government markets. EVP Gary Thompson helped get an article in Federal Computer Week about Gateway offering PC recycling in Topeka, KS, which led to a call from Philadelphia. "Cities and states can create more quickly than the federal government," says Thompson. "A lot of companies think they're going to get into the government sector right away. But it's a very long sales cycle. And working with the local or state government can provide that experience the federal government is looking for." Joe Paluska, deputy director of Hill & Knowlton's technology practice, also warns that entering the government market will be tough for newcomers. Not only is it a slower process, but much of the media is only interested in talking to companies already selling to the government. So even if a newcomer begins working with the government, media coverage could take even longer. "The biggest lesson is to be patient," says Paluska. "You're dealing with the government, and procurement cycles are long and slow. And if you don't have the expertise to get into this market, you better partner with it." Understanding the issues A hearty blend of public affairs, public policy, and tech know-how can help leverage relationships inside the Beltway and inside Silicon Valley. But what works in Silicon Valley won't necessarily work in Washington. The government is a risk-averse culture, and simply slapping a homeland-security veneer on a tech product will ultimately fail, warns O'Keeffe. The government wants to know that a potential hi-tech partner understands the issues and their needs, and can offer relevant solutions. "PR is helping organize and frame the debate," says O'Keeffe. "One of the key issues is communicating. And the challenge is to understand the issues, and help clients show they have the experience to solve the government's problems. Selling to the government is not like selling to another vertical. It's like selling to another country. The culture and language are different. They have their own hi-tech magazines and analysts. It's not the ideal place to hide if you're just waiting for the consumer market to bounce back." But not everyone is impressed with the job PR has done. Wilson Dizard, senior editor of Government Computer News, says many PR agencies are not familiar with the government's hi-tech needs, or how their clients can meet those needs. "These people come to us with ideas that are not credible for stories," says Dizard. "Hi-tech companies feel so much pressure to enter the government sector that many do so haphazardly, without taking time to learn the lingo, study the issues, or meet the influencers. The Department of Homeland Security is not going to give you a contract because of your razzmatazz PR. If you want to enter this space, you better do your homework." Ascendent Telecommunications did its homework, which led to a story in Federal Computer Week, which in turn led to a call the day the story was published from the deputy director of the Department of Justice. "You need to make sure you're communicating to the party that will get the most advantage from your solutions," explains Ascendent CEO Stephen Forte. "This market is a little less traditional. You have to hit it from multiple sides. Even if the government likes your product, they go through channel partners. So you need to go after the contractors. It's a very complex landscape." PR is also crucial in building visibility, credibility, awareness, and relationships, and letting those in power know that your client is in this market for the long haul, says Greg Dicks, VP of government systems for ActivCard. "You need an agency that knows that DOT stands for Department of Transportation, not the Treasury Department. Mistakes in this market can stay with you for a long time." So many companies and PR agencies are treading lightly into the government market for the first time. The standard line just won't cut it when selling to the federal government or a local school district, cautions Howard Opinsky, SVP at Powell Tate-Weber Shandwick. Messaging has to be developed so it makes sense within the constructs of what each federal, state, or local government department does. "The message has to be very holistic," Opinsky adds. "You're not selling a product, [you're selling] value to an institution that answers not to shareholders, but many stakeholders. You have to show an understanding of what the government is trying to achieve, and that you are willing to be a partner to help them achieve that goal. The government is being deluged by every tech company with a widget, and they are often selling little more than just a product. Having your company be seen as a valued partner is key."