“By any measure, the federal market for information technology is enormous — close to 8% of the discretionary budget. And while it’s not growing as fast as it did maybe in the 1990s, it’s by no means static. For what’s in the immediate future for this $118 billion industry, Federal Drive with Tom Temin turned to the senior director of research at Deltek, Deniece Peterson…”
“Tom Temin: So characterize the market in large for us. $118 billion, that’s addressable and that is available to contractors, or how does it all break down?
Deniece Peterson: So we look at what the potential pool of money is for contractor addressable work. And so we start by looking at the agencies that report to the Office of Management and Budget — it’s about 24 agencies — but then we expanded. Now we add in estimates for intel, there’s 50 to 60 small agencies, there’s quasi government organizations like the Postal Service. And then we also look at what we call embedded IT, which is IT that’s embedded in other programs, like IT that’s in ships and aircraft and things like that. We’re trying to get as complete have a view of the IT market is possible. So for analysis this year, looking ahead a year, we’re seeing about $118 billion for the contractor adjustable IT market. So, the growth is definitely slower than we’ve seen if we look back 5 or 10 years, but it’s definitely a very healthy market.
Tom Temin: And the growth, I guess, has slowed because of the shift to services, and away from a huge concentration on hardware spending. Could that be one reason it doesn’t grow as fast?
Deniece Peterson: Yeah, we’re definitely seeing that hardware, and to some degree software, is kind of dragging down the market a bit, because we are seeing that shift from on-premise software to cloud solutions, seeing price pressure on hardware, we throw the umbrella of category management on top of that, just trying to streamline and drive cost savings in IT commodity solutions. So we do see that the impact of some of the policy driving down growth in some of the market segments for sure…” Read the full interview here.
Source: Breaking down the $118B, ‘healthy’, federal IT marketplace – By Tom Temin, August 12, 2021. Federal News Network.
