(PRWEB) July 16, 2014
According to a new report from Deltek, federal IT spending will decline from $102 billion in FY 2014 to $94 billion in FY 2019 as agencies continue to streamline operations and improve the efficiency of IT programs. IT reform initiatives continue to compel agencies to maximize budgets and strengthen IT performance, which results in both reductions and investments.
Deltek’s new GovWin IQ report “Federal IT Market, 2014-2019,” provides analysis of contractor-addressable budgets across the federal Hardware, Software, IT Services, and Communications and Network Services markets – helping contractors identify areas of budget growth and contraction so they can better plan and execute their business development strategies. Deltek’s forecast includes IT spending not reported through the Office and Management and Budget (OMB), such as the judicial and legislative branches, the intelligence community, federal organizations that are not subject to federal IT budget reporting requirements, and IT embedded in large defense systems.
IT policies related to data center optimization, strategic sourcing, shared services and cloud computing are driving some cost savings. Agencies are reprioritizing and rescoping IT programs in an effort to maximize existing budgets and set the stage for lower spending in the future. This transition to a leaner federal government – and the ability to sustain it – requires technologies that facilitate the consolidation, integration and standardization necessary to develop uniform IT platforms known as Common Operating Environments.
“The proliferation of Common Operating Environments in many agencies is the basis of their approach to delivering enterprise IT,” said Deltek Analyst Alex Rossino. “Getting there requires a variety of investments and activities, from deploying standardized hardware and applications to reengineering IT networks.”
This enterprise-centric perspective will result in budget declines over the long run. In order to reach this goal within existing budget boundaries, agencies will eliminate redundant investments, focus on the “must-haves,” favor lower cost alternatives, and utilize strategic sourcing contracts.
In the course of this transformation, evolving IT policies will have an impact on all IT market segments. Strategic sourcing and data center consolidation and optimization efforts will put downward pressure on the IT Hardware and Software markets. The IT Services segment is similarly impacted by the administration’s focus on reducing service contracting, which represents the largest category of federal contracting. While not exempt from cuts, the Communications and Network Services market is sustained by growing bandwidth and mobility requirements.
Agencies will also continue to rally budget dollars around technology solutions that support mission priorities, such as cybersecurity and data analytics. Intelligence, Surveillance and Reconnaissance (ISR) and Health IT will be critical for the Department of Defense in particular.
With or without sequestration in 2016, budget modesty has become the norm as agencies plan for the future. “After experiencing sequestration in 2013, agency leaders want more control of where cuts happen,” said John Slye, Deltek Analyst. “This means redefining priorities and acquisition strategies to fit within new budget realities.”
Contractors must continue to adjust to this reality by ensuring that they have the strategies and tactics in place to pursue growth opportunities and protect market share.
For more information on GovWin IQ and this report, visit the “Federal IT Market, 2014-2019” page on GovWin.com. The report is free to subscribers of GovWin’s Federal Industry Analysis program. Press interviews can be arranged by contacting Lauran Cacciatori.
About GovWin IQ
Deltek’s GovWin IQ provides the market intelligence tools and analysis government contractors need to gain a competitive advantage and be a formidable player in the federal market. Backed by a team of government research and analysis experts, GovWin IQ provides the most powerful, comprehensive, and timely lead generation and business intelligence solutions available. More than $1.8 trillion opportunities are tracked every year – a number no other competitor can match. http://www.govwin.com
Deltek is the leading global provider of enterprise software and information solutions for professional services firms and government contractors. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 18,000 organizations and 2 million users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business, optimize resources, streamline operations, and deliver more profitable projects. Deltek – Know more. Do more.® http://www.deltek.com