Innovation, performance, and engagement are three themes that analyst firm IDC has identified as drivers for government purchasing in 2014. According to a recent IDC webinar, agencies are looking to leverage legacy systems and integrate new technologies in order to improve overall performance and continue to meet agency mandates.
Despite on-going budget constraints and recent failures in procurement and execution, performance management and return on investment will be a priority this year. Shawn McCarthy, IDC’s Government Insights Research Director, says FY 2014 will experience only a slight growth in IT spending of approximately 1.2 percent. That amount includes not only new technology purchases, but all expenses associated with IT operations, such as salaries, energy consumption, space rental, software, hardware, and IT services.
All indications point to agencies becoming far savvier in their expenditures. Increases should only be expected in niche areas that advance the agency’s core mission. One of the most significant areas of predicted spending increases will be in cloud and related services as agencies look to continue to drive down operational expenses. By 2018, IDC predicts government will redirect 15% of traditional IT spending to the cloud.
In an interview with the editors of The Modern Network , McCarthy explained that, while cloud spending will be the main driver, he does expect to see IT services spending to grow at a moderate pace – two to three percent per annum – and for it to be directed towards the following areas:
1) Network equipment – it seems like there’s always steady, slow growth in this area given the constant demand for bandwidth. As federal users continue to rely more on hosted applications, they will need more bandwidth to access cloud-based data, applications, and storage. Spending on network-related gear will remain healthy, according to McCarthy.
2) Mobile devices – smartphones, tablets, and similar consumer devices — will continue to see some growth. Because of the likelihood that government agencies will push for BYOD rather than in-house provisioning, this will be an area of slow growth, but growth, nonetheless in the public sector.
3) Security – McCarthy emphasizes that this is an area of real growth for agency spending as they seek to avoid headlines, scandal, and an ever-increasing range of threats. With an expanding mobile workforce, the need for trusted remote access is paramount for agencies. In addition, there is demand for more machine-to-machine authentication that will drive investment in this area.
Federal agencies are beginning to understand that cloud, mobility, security, among other areas, have an impact on flexibility, responsiveness, and performance to move the mission forward and, therefore, will be at the core of IT investments moving forward. The real innovation in the coming year will come as agencies fully embrace these technology areas and develop a mash-up of solutions that will transform how the government achieves its mission.