Unique Opportunities in Changing Government Technology landscape
The U.S. Federal and State governments have been making fundamental changes in the way they purchase and manage technology. While transition to cheaper mobile devices will contribute to lower spending on equipments, shared services, consolidation and cloud computing will reduce total cost of operations, including spending on maintenance services. Deltek estimates that nearly every agency will experience a decline in spend and total federal IT spending could fall from $121 billion in 2012 to $113 billion by 2017.
Government technology vendors need to identify the opportunities in this changing landscape. Reducing costs and improving efficiency is a primary consideration of agencies and they still plan to invest considerable amount of money on technology in these areas. Analytics is another area where technology vendors will find opportunities in government market. Per IDC's analysis, top drivers for government to implement business analytics/intelligence solutions are cost control, internal reporting and information sharing, and workforce optimization. Analytics will help agencies identify and reduce waste, fraud and abuse. Another field where IT vendors can find opportunities is cloud computing/data center consolidation. It is estimated that up to 10% of States will have shared cloud hubs by the end of 2012 and likely to grow to 65% of the States by 2015. Though governments are looking for options to develop cloud-services internally, opportunities still exist for IT vendors as there are increased demands email, web hosting word processing, spreadsheets case management and financial management solutions.
Government business is continuously transforming and thus technology vendors need to adapt by realigning their business strategies and focusing on delivering measurable value with predictability to be successful in this changing environment.