The government’s ability to face its challenges in the coming years will hinge on its ability to develop, manage, share, and secure a solid technology environment
Reston, VA (Vocus) June 2, 2008
Information Technology (IT) contract spending by the U.S. federal government will grow 4.1% annually, from $71.9 billion in 2008 to $87.8 billion by 2013, according to INPUT’s five-year Federal IT Market Forecast. Growth is slowing due to uncertainty about new administration priorities, the current economic downturn, the rapid growth in mandatory spending, and the crowding-out effect of war spending on overall discretionary spending.
These factors, combined with increasing Congressional scrutiny on budgets and performance, create an environment of ‘tempered momentum.’ “Although the anticipated growth rates are below the historical average, government’s increasing reliance on technology sustains momentum in IT spending, especially as it relates to increasing efficiency and reducing operational costs,” said Richard Colven, vice president of industry analysis at INPUT.
Information sharing, the need for better IT management techniques, and relatively flat employment levels are major drivers impacting federal IT spending. For cost savings, agencies will move forward with IT infrastructure optimization and virtualization, as well as consolidation.
Annually, INPUT sizes and forecasts the market for IT products and services in the U.S. Federal Government. Its forecast includes spending by organizations within the three branches of government, quasi-government agencies, and the intelligence community. “The government’s ability to face its challenges in the coming years will hinge on its ability to develop, manage, share, and secure a solid technology environment,” said John Slye, principal analyst at INPUT. “We expect federal agencies will be paying a lot of attention to their technology, even if only to figure out how to drive costs out of steady state operations to free up funding for new work. The spending environment may seem gloomy, but in light of fiscal and economic conditions, IT spending growth remains healthy.”
These findings and others were released in INPUT’s Federal IT Market Forecast, 2008-2013. More details are available at http://www.input.com/corp/library/detail.cfm?itemid=5437&utm_id=1709.
Editor’s Note: To speak with the report author regarding this release, please contact Helena Brito at 703-707-4161.
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 1,300 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.
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