Compass Intelligence forecasts that within the US Federal Government departments, the defense department will be the greater recipient of IT expenditure in an otherwise sedate market. While the defense department will witness faster growth than its civilian counterpart, both levels will aid Federal Government IT expenditure in faster growth than the US Government expenditure overall. IT spending is long past the heady days of double digit growth and has graduated from being the innovative trailblazer of the seventies and eighties to becoming a stereotypical cost center of today. This graduation has subjected spending in this area to all the pushes and pulls of any other cost center. IT is more or less resigned to a very slow growth unless it comes up with disruptive technologies to alter the equation. Defense preparedness has its own dynamics, somewhat removed from market reality. The US has to reconcile with fresh challenges in the Asian region as well as in the Middle East, which will play a part in increasing spending in infrastructure, of which IT is an integral part. Continued budget uncertainty also creates delays in the market. Although IT budgets will remain tight over the next 12 to 18 months, opportunities for small IT vendors exist as many agencies divide up contracts into small chunks
US Federal Government IT Expenditures By Level (US$x1000), 2011-2016
The Federal Government continues to be stricken with budget shortfalls and increased pressure to reduce the federal debt. This has really pushed the OMB to scrutinize every dollar spent by federal agencies, and to closely police technology spending and investments across both military and civilian agencies and departments.
Some of the primary areas of interest around the Federal Government sector include Cloud Computing, Mobility Solutions, Social Media, Private High-speed Networks, Data Analytics, and government-ready devices whether used in the military or civilian agencies and departments. Federal Government tech spending is primarily focused on short-term projects, while contracts and RFPs are continuing to focus on lowest bid wins and competition . The government is continuing to look to the web for social interaction, community services, and web-based services. At the federal level, spending has somewhat subsided for deployed military technology solutions and there is a stronger focus on civilian-based agencies and departments in terms of technology spending. There are a number of federal agencies really struggling including the U.S. Post Office and the majority of departments dealing with Finances, Lending, and Monetary responsibilities. These federal departments are expected to be less of an opportunity over the next few years. Altogether, budgets continue to be challenges and follow a conservative path, and opportunities revolve around data networks, mobility, cloud, and 3rd party services such as Managed and Hosted solutions.
US Federal Government IT Expenditures By Level, 2011-2016
US Federal Government Telecom Services & Equipment Expenditures By Level, 2011-2016
US Federal Government Civilian Department IT Expenditures By Category, 2011-2016
US Federal Government Defense Department IT Expenditures By Category, 2011-2016
Please visit Compass Intelligence to learn more: http://www.compassintelligence.com/ and visit our Thought Leaders Research Page to learn more about The Pulse of the Thought Leaders Panel
Stephanie Atkinson - Managing Partner at Compass Intelligence, High-Tech Consultant/Analyst, Mother, TX Aggie, Dallas native, TX hillcountry resident, Interests: Tech, Telecom, Mobility, M2M,and the use of Tech in business. You can reach her at email@example.com or follow her on twitter (@stephatkins).