Information Technology (IT) contract spending by the U.S. federal government will grow 4.1% annually, from $71.9 billion in 2008 to $87.8 billion by 2013, according to INPUT’s five-year Federal IT Market Forecast. Growth is slowing due to uncertainty about new administration priorities, the current economic downturn, the rapid growth in mandatory spending, and the crowding-out effect of war spending on overall discretionary spending.
These factors, combined with increasing Congressional scrutiny on budgets and performance, create an environment of ‘tempered momentum.’ “Although the anticipated growth rates are below the historical average, government’s increasing reliance on technology sustains momentum in IT spending, especially as it relates to increasing efficiency and reducing operational costs,” said Richard Colven, vice president of industry analysis at INPUT.
Information sharing, the need for better IT management techniques, and relatively flat employment levels are major drivers impacting federal IT spending. For cost savings, agencies will move forward with IT infrastructure optimization and virtualization, as well as consolidation.
More information on the IT industry can be found at www.supportindustry.com
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