Cloud Computing: Declining Federal IT Market Will Still Have Opportunities
July 23, 2012
Grazed from GovWin. Author: Deniece Peterson.
As the federal information technology market transitions, contractors are finding that some of the key opportunities available now could mean less work in the future.
Initiatives to share services and move more computing to the cloud will likely mean that spending will contract or flatten over the next five years. Deltek anticipates that nearly every agency will experience a decline and total federal IT spending could fall from $121 billion in 2012 to $113 billion by 2017.
Spending on technology equipment and professional services is particularly expected to decline as the government makes fundamental changes to the way it purchases and manages its technology. Reductions in the number of federal workers and a transition to cheaper mobile devices will drive down equipment spending while shared services, consolidation and cloud computing will reduce services spending…
Still, there are opportunities in agency efforts to find cost savings and improve efficiency. Contractors with capabilities in areas such as analytics — where they can identify and reduce waste, fraud and abuse — cloud computing and data center consolidation will have a leg up on the competition.
Contractors may need to reevaluate business strategies and operational processes — from their approach to mergers and acquisitions to capture strategies and program management — to enable growth.
More importantly, contractors must consider how they can meet federal agencies’ IT needs along the path of transformation.
Survival in this market is all about adaptability, and shoring up business development, customer relationship and reporting processes is more critical than ever. Agencies are under pressure to transform, so contractors must transform too.