Obama's Budget Reveals Technology Spending Trends for Next Five Years

Share Article

Comprehensive INPUT report identifies key developments shaping federal IT investment

News Image
The federal government will take the lead as a role model through the use of green technologies, practices and policies.

INPUT, the leading authority on government business, today announced the release of its research report, ''Federal IT Market Forecast 2009-2014,'' that analyzes trends that will impact federal government IT spending. Using the fiscal year 2010 budget request released by the Office of Management and Budget (OMB), the report predicts significant growth in cloud computing, green technologies, healthcare IT, and cyber security.

Despite the struggling United States economy, INPUT projects that federal government demand for IT products and services will grow at a compounded annual rate of 3.5 percent over the next five years, reaching $90 billion in total market value by 2014, up from $76 billion in 2009. The Obama Administration's broad initiatives will drive technology adoption in the healthcare, energy and green building markets. Increased adoption of cloud computing, Service Oriented Architecture (SOA), and cyber security projects will also shape the federal IT market.

"The Obama Administration's efforts to improve the economy include making significant investments in the federal government's IT infrastructure," said INPUT CEO Tim Dowd. "This creates demand for companies that can facilitate the growth of this infrastructure. For example, IT vendors that can help the federal government take advantage of cloud computing, cyber security or assist government agencies in developing the environment will be well positioned."

Cloud Computing

The cloud computing market is expected to grow nearly 30 percent over the next five years, to over $1 billion, transforming the federal IT infrastructure. Exploration of cloud-based projects is a top administration priority because of expected cost savings and increased efficiencies. The National Institute of Standards & Technology (NIST) helped create the momentum for cloud initiatives on a federal level by crafting security standards and definitions for cloud projects. SOA implementations by the Air Force, Navy, Army and other government agencies are helping to drive the adoption of cloud computing.

Cyber Security

The federal government will increase information security spending from $8.2 billion in 2009 to $12.2 billion by 2014 at a compound annual growth rate (CAGR) of 8.3%. Even still, according to INPUT research and analysis, less than 1 out of 10 dollars in federal government IT budgets goes to securing systems and data, and new initiatives such as the DoD's cyber command and other ongoing government wide cyber initiatives. "In light of the recent cyber attacks on the New York Stock Exchange, White House, and other government agencies, INPUT has seen heightened interest and activity in this area from our constituents -- both contractors and government officials. We expect cyber security issues will continue to increase in profile and priority in the federal IT market for the next several years," Dowd added.

Sustainable Technologies

The Energy Independence and Security Act (EISA) of 2007, along with environmental mandates in the economic stimulus package, are driving government adoption of green IT products and services. Smarter energy management systems will include "smart grid" modernization of the utility industry, representing a significant long-term opportunity for vendors in this space.

"There is a focus on reducing the nation's carbon footprint and the cost of energy through investments in renewable energy sources and smart grid technology," Dowd said. "The federal government will take the lead as a role model through the use of green technologies, practices and policies."

Healthcare IT

Healthcare reform will continue to drive growth in critical healthcare IT segments such as electronic health records, health information/decision support systems and claims processing. Healthcare IT investments will occur in waves, beginning with the modernization of current systems and ending with a complete infrastructure transformation. The stimulus package is setting the groundwork for the early stages of investment by making $19 billion available for healthcare IT projects.

"Technology companies wishing to do business with the federal government over the next five years need to begin positioning themselves now for the opportunities that will grow out of the increased investment in IT," said Dowd.

About INPUT

INPUT is the authority on government business. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 2,000 member organizations, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information about INPUT, visit http://www.input.com or call 703-707-3500.

Proper use of name is INPUT.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Hiba Mohamed
INPUT
703-707-3686
Email >

Chuck Kabat
Schwartz Communications
781-684-0770
Email >
Visit website