December 09, 2008, 10:52 AM — Gartner's public sector analyst Rishi Sood predicted recently that federal IT spending will drop by $4 billion in 2009, and that growth will not resume until 2012. This is a startling forecast, given that many had seen government as one of only a handful of segments that would enjoy continued growth in IT spending during the recession. If government IT spending decreases along with every other industry sector, then the tech business is indeed in trouble.
Sood dramatically revised earlier estimates, claiming that 2011 spending will be $9 billion less than what Gartner had earlier predicted. He said that there will still be opportunities for VARs and other solution providers, especially in the Veterans Administration, Homeland Security, and Health and Human Services, which have the largest civilian budgets.
I've seen research to the contrary however, and although I would expect slow growth, I disagree that spending will actually decrease in real dollar amounts. Even under conservative leadership, IT spending has increased as the Federal government continues to embrace modernization, something it has been doing since the E-Government Act of 2002. With a Democratic President and Congress, does anybody really expect spending on anything to decrease? Not likely. (Not that the Republicans were ever any more thrifty, mind you.) New economic stimulus legislation already being discussed would create massive public works projects, and these projects require a lot of IT to make them run. Defense spending ran high under the Bush administration, making Defense a huge portion of federal IT spending, but even under a less hawkish President, this isn't likely to go down by much, if at all. Today's war machine runs more on technology than it does bombs and bullets. And of course, analysts should not discount the impact of having a tech-savvy President who understands the value of IT projects.