August 03, 2011, 11:19 AM — Federal IT spending will be sluggish over the next five years, with the exception of spending on some emerging technologies, a new research report predicts.
“Federal Information Technology Market, 2011-2016”, by enterprise software vendor Deltek predicts "moderate growth in a limited number of high-priority areas," with overall federal IT expenditures expected to grow less than 2 percent annually through 2016.
Deltek predicts "demand for vendor-furnished information systems and services by the U.S. government" will go to $91.3 billion in 2016 from $84.1 billion this year, an annual growth rate of just 1.7 percent.
Deniece Peterson, Deltek's senior manager of federal industry analysis and co-author of the report, said, "While the administration is still focused on key cost-saving measures such as cloud computing and data center consolidation, agencies will be under pressure to execute those plans under strict budgets. This means opportunities may be rescoped or restructured as agencies struggle with funding and managing these projects."
The study cites several key factors shaping the current federal IT market, particularly "growing federal deficits and competing priorities pressuring agency discretionary and IT budgets" and "directives to increase contract performance, transparency, reporting, and accountability pressuring agency IT management."
Peterson says that vendors who want "to grow organically in this market will need to be smarter, more strategic and demonstrate strong operational performance. Growth will come a lot harder in the next five years than it did in the last five years."
What a shame, because I thought the recent good times would never end!
Of course, since the federal government essentially has become dysfunctional and chaotic, even these modest predictions could be way off. And should federal agencies be forced to slash their IT budgets, the quill pen, scratchpad and abacus could be standard equipment in federal IT offices. Just like the Founding Fathers used!