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DHS Awards Cybersecurity Continuous Monitoring Contracts

The U.S. Department of Homeland Security has awarded contracts worth potentially $6 billion to 17 companies to provide hardware and software tools and services to support a government-wide cybersecurity continuous monitoring and diagnostics effort. The cloud-based initiative will implement Continuous-Monitoring-as-a-Service (CMaaS) and other IT security tools to harden federal civilian networks against cyber attacks.
 
The announcement reported this week indicates that the Broad Purchase Agreement (BPA) contract has a one-year base and four one-year options. Congress appropriated more than $183 million in the final fiscal year (FY) 2013 budget and the White House has requested $168 million in its FY 2014 IT budget.
 
The Continuous Diagnostics & Mitigation (CDM) program provides continuous monitoring, diagnosis, and mitigation activities to strengthen the security posture of the federal .gov networks. DHS is overseeing the procurement, operations, maintenance of sensors/dashboards deployed to agencies, in partnership with the General Services Administration (GSA) which has established a portal to facilitate CDM program purchases and will be charging a 2 percent fee to agencies using the BPA.
 
GovWinIQ has been tracking the contract opportunity for more than a year. The DHS National Protection and Programs Directorate (NPPD) announced that it was developing the CMaaS capability with the goal of establishing an automated dashboard that displays information about cybersecurity risks based on data collected through an array of sensors.
 
The BPA winners and their respective tool suites are:
 
  • Booz Allen Hamilton – McAfee, ForeScout
  • CGI – Tivoli Endpoint Manager, ServiceNow, Retina, BDNA, Splunk
  • CSC – ServiceNow, ForeScout, McAfee, Tivoli Endpoint Manager
  • DMI – Lumension, Triumfant, Hewlett Packard, ForeScout, SailPoint
  • DRC – McAfee, ForeScout, VeraCode
  • GDIT – McAfee, Microsoft, Symantec, Veracode
  • HP – Hewlett Packard, Symantec, Tenable, View Trust, AppSec
  • IBM – Tivoli Endpoint Manager, IBM, Rapid7, Core Impact, Hewlett Packard
  • KCG – McAfee, IBM, Veracode, Core Impact, ForeScout
  • Kratos – McAfee, ForeScout, Microsoft, RedSeal, Veracode
  • Lockheed Martin – McAfee, ForeScout, ServiceNow, JBOSS, AirWatch
  • ManTech – McAfee, ForeScout, Veracode
  • MicroTech – CA Client Automation, InfloBlox, Symantec
  • Northrop Grumman – ViewTrust, McAfee, ForeScout, Veracode
  • SAIC – McAfee, ForeScout, Veracode
  • SRA – nCircle, Symantec
  • Technica – Symantec, p0f (Passive OS Fingerprinting)
 
These firms will now compete for task orders under the new BPA – which is open to all government agencies, including state, local and tribal entities – for the following functional and task areas:
 
 
This BPA marks new territory for federal cybersecurity efforts and acquisitions. It seeks to help agencies down the path to effective real-time monitoring of their networks’ security posture, a goal that has remained elusive for many agencies. And while each agency will continue to focus their on their own core information assurance and security the BPA may also bring more continuity to the overall .gov domain. Notice that many of the security tool providers in the list above hold positions on multiple contracts.
 
This also impacts agency acquisitions. Historically, pure cybersecurity opportunities were few and far between and most efforts were embedded in network operations and infrastructure efforts. Those that you could find were either small and fragmented by agency or consolidated into huge service contracts that only the largest of firms could perform.
 

The contracts also bolster the fed’s move toward cloud implementations and shared services, pushing IT-as-a-service into the cybersecurity realm. Cost is one of the key drivers in the push to the cloud and this BPA could bring some additional competitive pressure to an area that has so far seemed immune to budget pressures, although agencies have been saying for some time that cyber spending will eventually level off and even come down.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about 
GovWin FIA. Follow me on Twitter @GovWinSlye.

Federal CIO Council Restructures

The federal Chief Information Officer (CIO) council is reorganizing to support federal IT priorities: Innovate, Deliver, and Protect. Specific projects will be managed by committees aligned to technology focus areas like program governance, technology adoption, and security.
 
 

 
 
Each of the three committees targets a priority area for federal information technology.
 
 
·            The Information Security and Identity Management Committee (ISIMC) provides a collaborative forum for agency CIOs and Chief Information Security Officers (CISOs) to identify and develop policy recommendations for high-priority security and identity management initiatives.  This committee will be led by Rob Carey, the deputy CIO for the Defense Department, and Luke McCormack, the Justice Department CIO.
 
·            The Innovation Committee will work to enable a 21st century government through the use of new technologies for delivering digital services, deploying mobile technology, exploring modular IT development strategies, and leveraging federal data as a strategic resource. Reportedly, this group will support open data initiatives. This committee will be led by Casey Coleman, the General Services Administration's CIO, and Margie Graves, the Homeland Security Department's acting CIO.
 
·            The Portfolio Management Committee will focus on agency-wide best practices for governance and management processes, optimization of commodity IT resources, adoption of shared services platforms, and enterprise architecture. This committee will be led by Interior Department CIO Bernie Mazer and Bob Brese, the Energy Department's CIO.
 
Along with these committees, the council will work with task forces for data center consolidation and shared services. These task forces will support the sharing and disseminating of best practices and lessons learned across agencies from the two government-wide initiatives. Comprised of data center program managers, facilities managers, and sustainability officers, the Data Center Consolidation Task Force will work to progress towards the government’s consolidation goals. To support these goals, the task force will be working on data center metrics to incorporate into PortfolioStat conversations. The Shared Services Task Force will bring together agency shared service representatives to promote the use of inter-agency shared services for commodity IT, support and mission services.
 
This restructuring is the first of this extent in several years. And the move comes as the council is positioning itself to be more engaged with other CXO councils and across the federal community.
 
Originally published for Federal Idustry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

The five council committees will consolidate into three main ones, which will work with two task forces and support information exchange activities for several self-organizing communities of practice.

Treasury’s FIT Office Leading the March to Financial Management Shared Services

OMB has tasked Treasury’s Office of Financial Innovation and Transformation (FIT) to assist in design, implementation, and improvement of federal financial management services shared service provider offerings.  Enhancements to the Federal Shared Services Provider’s (FSSP) framework are meant to stimulate larger agencies to move to a shared services environment for future modernization of core accounting systems.

OMB released a memo in March directing agencies to move their financial systems to a shared services environment.  OMB is encouraging agencies to look to federal providers first, as opposed to commercial vendors.

Using a shared services provider for financial management will provide the following benefits: 

  • Reduce risk of failed systems implementations (cost avoidance) 
  • Free up agency resources to focus on mission-based programs  
  • Ensure greater standardization of data which allows for more transparency  
  • Enable better decision-making by focusing resources on improved data analytics  
  • Make adoption of new government-wide requirements easier  
  • Deliver greater efficiencies and cost savings

OMB has been trying to incite agencies to adopt shared services for financial systems since 2004 with the advent of the Line of Business initiative.  The administration at the time named four federal agency shared services providers – DFAS, GSA, Interior’s Business Center, and Treasury’s Bureau of Public Debt.  Agencies were to move financial processes to one of these four SSPs when it came time to upgrade their current systems.  However, only small agencies made the leap.  Few large agencies made the change, and those that did, found if difficult.

OMB’s controller Danny Werfel stated in a March interview, that the past initiative was slated for agencies to move their entire financial systems to a provider, which became too complex.  The new effort is focused specifically on general ledger systems. 

FIT is playing a critical role in the migration effort by aiding OMB in assessing the current landscape of FSSPs and identify capability gaps, evaluating agency needs, identifying the need for additional FSSPs, and developing a strategy to address gaps.  FIT will also provide oversight for the effort by evaluating any new agency systems modernization plans, establishing a framework for agency migration efforts, maintaining core government-wide requirements, and facilitating the implementation of government-wide operational capabilities.

FIT recently launched a series of teleconferences to introduce the financial management shared services initiative to industry and explain how industry will be engaged throughout the process.  FIT is taking the lead in developing the marketplace where agencies can choose from financial service offerings, service delivery options, and purchase through SSP storefronts.  The ultimate goal is to launch a financial management product and services catalog by spring or early summer of 2014.  FIT will act as a liaison for agency customers, but they will buy directly from the provider.  FIT will work with agencies to develop a modernization timetable which will include the selection and migration to a SSP. 

Werfel expects it will take several years for SSPs to be able to meet all agencies’ financial system needs.  Enhancements to SSP service offerings will be added to the initial catalog and storefronts over time. 

 

Commercial Best Practices for Buying Services Could Save Feds Billions

A recent GAO report advocates using commercial best practices for strategic sourcing as a method for gaining efficiencies and reducing federal spending on services contracting. 

GAO’s recent study, “Strategic Sourcing:  Leading Commercial Practices Can Help Federal Agencies Increase Savings When Acquiring Services,”

The federal government spent $307 billion on services in FY2012.  The graph below shows the top ten services categories by federal spending levels for FY2012.

GAO examined large commercial companies and their best practices for purchasing services for their enterprise in order to develop recommendations for federal agencies to incorporated similar processes and realize subsequent savings.  Officials from the companies GAO profiled reported savings of 4-15% over prior year spending through strategically sourcing the full range of services, such as facilities management, engineering, and information technology.

Similar savings translated to federal agencies would come to $12.3-$46 billion.  Federal agencies have sizable opportunities to leverage leading commercial practices to lower costs and maximize the value of the services they buy.  GAO reported in September 2012, that large procurement agencies such as DoD and VA only leveraged a small percentage of their buying power through strategic sourcing.  GAO also reported these agencies faced challenges in acquiring reliable spending data and analyzing it, applying strategic sourcing to services purchasing, and securing leadership support.

The graph below shows the level of services spending by company interviewed by GAO along with the percentage of realized savings over the prior year.

GAO found that the companies they interviewed followed five foundational principles to leverage spending and market knowledge for more efficient procurement:

  • Maintain Spending Visibility    
  • Centralize Procurement   
  • Develop Category Strategies
  • Focus on Total Cost of Ownership
  • Regularly Review Strategies and Tactics

Additionally, companies analyze their spending patterns in terms of two essential variables: the complexity of the service and the number of suppliers for that service.  Acquisition of services varies depending on where the services fall in relation to these two variables.  The tactics companies use based on the variables fall into four basic categories, depicted in the framework below.

For example, Walmart leverages its company size to compete basic or commodity services that have many suppliers, such as maintenance.  But when Dell needs to purchase sophisticated services with few suppliers, such as consulting, it negotiates cost drivers such as labor rates.  The framework is dynamic: over the long term, companies seek to reduce complexity and bring in additional suppliers to take advantage of market forces like competition.

 

 

 

 

OMB Mandates Shared Services for Financial Systems

On March 25, the Office of Management and Budget (OMB) released a memo directing all executive agencies to use shared service solutions for future modernizations of financial systems. The guidance outlines the evaluation process the Treasury Department will use to assess existing Federal Shared Service Providers (FSSP). It also describes the steps the Treasury’s Office of Financial Innovation and Transformation (FIT) will take to review new agency proposals for aligning with this mandate.
Building on the Federal Information TechnologyShared Services Strategy (as well as OMB’s review of financial systems from June 2010), the memo from federal controller Danny Werfel explains that “the cost, quality and performance of Federal financial systems can be improved by focusing government resources on fewer, more standardized solutions that are implemented and operated by experienced staff.” In addition to streamlining the variety of solutions currently deployed across the government, the use of FSSPs will help to reduce the time it takes to implement systems and to improve data quality. As part of this guidance, OMB is encouraging agencies complete market research to evaluate solutions and complete analysis of alternatives from both FSSPs and commercial SSPs. Werfel suggests taking vendor past performance and advantages of existing partnerships into consideration when assessing solutions.
The guidance makes it clear that agency-specific solutions will be discouraged. Still, there is some room for “rare” exceptions. Agencies would need to demonstrate exceptional circumstances (e.g. unique requirements or adequate scale) through alternatives analysis that establish the agency-specific approach is clearly preferable in terms of best value for the Federal Government. Should an agency be approved for an agency-specific solution, they still need to participate in government-wide benchmarking and governance. 
Moving forward, OMB will work with agencies to explore modular updates for financial system, to target enhancements and to prioritize funding for modernization proposals. OMB will be working with agency Chief Financial Officers (CFOs), Chief Information Officers (CIOs) and FSSPs to identify common standards and requirements. Two offices within OMB, the Office of Federal Financial Management and the Office of Federal Procurement Policy, will work with agencies to align acquisition strategies to promote the Cloud First policy and strategic sourcing goals. Agencies with near-term modernization needs are advised to plan for adopting a shared services approach. In the coming months, OMB will issue new guidance on technology and business requirements for financial systems.
This mandate from OMB comes on the heels of the Government Accountability Office removing management of interagency contracts from its 2013 High Risk List. This list calls attention to agencies and program areas that are particularly vulnerable to fraud, waste, abuse and mismanagement. GAO removed the high risk designation for interagency contract due to improvements in several areas including: progress addressing identified deficiencies, adding management controls, creating a policy framework for new contracts, and taking steps to provide better data.

While agencies aim to improve efficiency and deliver greater return on investments, they are looking increasingly to strategic sourcing and shared services a means of leveraging the government's buying power.  Tracking spending through agency mandated contract vehicles, we tend to end up with piecemeal impression of the impact these acquisition trends are having on the market. As luck would have it, the Office of Federal Procurement Policy (OFPP) has a registry of interagency contracts. However, according to Jack Kelly, Senior Policy Analyst for OFPP, the status has not been recently updated.  The current extent to which agencies are leveraging shared service contract vehicles isn’t entirely clear, but Kelly suggested that the Strategic Sourcing Leadership Council (SSLC) is likely to get engaged in activities to review and update the interagency contract registry. In short, we can expect strategic sourcing and shared services to continue shaping federal spending.

Shared services: A compelling model for government business

Deltek is pleased to present a guest blog on cloud computing from Microsoft. Over the next year, the General Government Services team will be looking to partner with leading vendors in the fields of cloud computing, enterprise resource planning software, student and teacher information systems, statewide longitudinal educational data systems and other core technologies tracked in the GovWin IQ Opportunities Database. Special thanks to Joel Cherkis and Michele Bedford Thistle for contributing their valuable insight and opinions regarding cloud computing.
 
If you are interested in guest blogging for Deltek in the topics mentioned above, reach out to DerekJohnson@deltek.com for more information! Meanwhile, be sure to follow us on LinkedIn!
 
By Joel Cherkis, Government General Manager, Microsoft
 
As public sector organizations around the world seek to cut costs in response to economic and budget pressures, many are looking for new strategies to deliver on their missions. Adding to this challenge is that amid shrinking budgets and resources, more than ever, citizens are demanding services from government that rival the best and most innovative in the consumer world.
 
In this era of doing more with less, shared services – a new computing model made possible by the cloud – is rapidly gaining popularity in government. It refers to taking a service, application, or infrastructure owned by one organization and sharing it via the cloud with multiple parties, either within the same organization or adjacent ones. Analyst firm IDC Government Insights predicts that in 2013, shared services will account for 18 percent of the government cloud market and will offer new ways of procuring and provisioning technology.
 
The benefits of this model are clear. By combining the IT resources of departments, agencies, and even various levels of government, public sector organizations collectively stand to realize enormous cost savings by eliminating the need to independently own and manage their own IT resources. There are also important opportunities to boost efficiency by consolidating IT resources and maximizing the use of underutilized applications and services by opening them to a broader set of stakeholders. With this new model also comes greater access to innovation, particularly for local government leaders who, despite limited budgets, can now access the latest technologies by collectively sharing the cost. 
 
A great example of an organization that’s taken advantage of shared services in the cloud is Staffordshire County Council in the U.K., which created the Staffordshire Public Sector Network (PSN) to enable public sector organizations in the area to securely share services over a common network. As a result, the council is now able to deliver a pricing model based on usage of cloud services, maximize its current IT investments, and better predict future IT needs because of its new approach.
 
Shared services offers an exciting new model for government, and stands to change the way that public sector organizations use and procure technology. By fully leveraging economies of scale, shared services can help governments maximize their investments in technology, improve utilization of existing resources, and expand access to innovation by sharing the cost of adopting the latest technologies. As organizations continue facing challenging budget environments, I believe this will drive even more governments to adopt a shared services approach. If you’d like to learn more, I encourage you to check out our Microsoft On Government blog, which frequently covers this topic.
 
To learn more about cloud computing procurement in the state and local marketplace, be sure to check out Deltek’s 2012 report, “Creating the Hybrid Cloud,” by research analyst Derek Johnson (subscription required).

NASCIO divulges state CIO priorities in annual survey top tens

The National Association of State Chief Information Officers (NASCIO) recently published its 2013 State CIO priorities and priority technologies, based on its annual state CIO survey. The survey is a valued peak into the minds and wish lists of state IT executives, and when compared against past priorities, we can see that consolidating existing IT infrastructure and optimizing it for the future (particularly for the cloud) will be among the highest priorities for CIOs this year.
 
 
In this year’s top three, we see a fairly consistent pattern among the states of shifting away from the budget cutting, cost-saving measures of the post-recession years, toward much-needed reinvestment in long-term IT infrastructure. Among last year’s top three, consolidation/optimization remains number one, but budget and cost control falls to number five, and governance drops off the list completely. The second spot this year goes to cloud services, which didn’t even make the list until 2011. Security makes a triumphant return to the top three after being a middle-of-the-pack priority since 2009. In my opinion, these three priorities are all connected and track fairly well with what Deltek has seen in the market over the past few years.
Initiatives to consolidate or upgrade existing data centers have been, or are taking place in Oklahoma, Texas, Florida, New York, Pennsylvania and North Carolina. Among these states, New York, Pennsylvania, North Carolina and Texas require significant cloud capabilities for their new consolidated data centers. In many cases, states are looking to the private sector to implement these initiatives and guide them on the right path. Of course, as the importance of cloud-based IT services rise, so do concerns about secure technologies. While security is no longer the barrier to cloud entry that it has been in the past, it is and will remain one of the top concerns for CIOs as they continue integrating the cloud into their existing IT infrastructure.
2013 CIO Technology Priorities
NASCIO also queries its members about their top 10 priority technologies. While the shakeup from last year’s top three is less pronounced, we continue to see a distinct pattern emerging in the minds of state CIOs. It is clear that many envision a future government workforce that is mobile, virtual and able to access workplace resources from anywhere on the planet. While this likely falls short of representing a harbinger of doom for the face-to-face,  brick-and-mortar way of doing state business, the investment in these top three technologies may very well be laying the groundwork for such a future.
 

 Not surprisingly, the new top technology pursued this year is cloud-based services. This comes as no surprise to Deltek, which has seen an explosion of cloud-related procurement in the last three years, as well as procurements for other technologies with specific cloud-integration components built into solicitations. We are quickly approaching the point (if we have not reached it already) where cloud integration requirements for state technology RFPs are the norm, not the exception.
Also notable is the journey of mobile workforce technologies, which hung around as a low-level CIO priority from 2007-2009, dropped out of the top 10 entirely in 2010-2011, and returned this year with a vengeance as the number two priority technology. As cloud computing continues to make it easier for government employees to virtually access their workplace from remote environments, governments are planning to put some serious dollars into making sure their workforce has the mobile computing tools necessary to take advantage of this new environment.
 For the full version of this AP with a complete breakdown of policy and technology priorities, click here (subscription required)

Future of Federal IT Environment Requires Fundamental Changes of Hardware Vendors

In our newly published Federal Information Technology Hardware Market report, we forecast that demand for vendor-furnished IT hardware by the U.S. government will decrease from $28.7 billion in 2012 down to $20.2 billion in 2017, a compound annual growth rate (CAGR) of almost -7%. Our team started by envisioning what the federal IT environment will look like in 2017 and the game-changing trends that will shape that future.
In preparation for writing the report, entitled Federal Information Technology Hardware Market, 2012-2017, we looked at many trends to envision the year 2017 and the most impactful trend, by far, is the fiscal state of the federal government. Risks from China's and Japan's flagging economies (undermining their ability to continue financing our government's out of control spending), the Eurozone crisis, and continued federal revenue shortfalls indicate a tougher time annually financing federal government spending.  Those threats and the ballooning national debt and interest payments on it mean that annual pressure to cut agency budgets will only intensify.
In 2014 alone, the administration is asking agencies to cut their IT budgets 10% and make suggestions of how to reinvest that money to save even more (though no sure promises to allow agencies to re-invest have been forthcoming). However, the continued agency approach of cutting spending while making only incremental changes in what they fundamentally do and how they do it, won’t meet the challenges that lie ahead. Moreover, no matter who is elected president, the administration through OMB will continue to challenge agencies to ‘Do More With Less.’  
However, changing technology approaches, such as cloud computing, and eventually some degree of wholesale ‘IT-as-a-Service,’ can enable agencies to keep doing more with less.  Amidst consolidation initiatives to increase efficiencies and reduce spending, agencies have been experimenting, with some degree of hard-won success, with the technology capabilities offered by innovative vendors and utilized more broadly in the commercial market. In the future, agencies will continue to quickly evolve their technology strategies and approaches and shift how they invest.  With greater budget pressure, agencies will become less and less risk adverse, especially as a generation of federal IT professionals retires, and the next generation of young innovative IT professionals take charge. 
Game-Changing Trends
In the report, our team highlights five game-changing trends that portend to disrupt and reshape the federal IT environment and market over the next five years. These trends spell the final death-knell business-as-usual, as well as strategies to morph over time for federal contractors as a whole, and hardware vendors in particular:  
·         Managing Data Not Infrastructure – Agencies will realigning their IT investments to focus on managing and securing data instead of managing infrastructure. The data-centric approach is anticipated to increase the agility of agency IT environments, reduce costs, and enable agencies to adopt emerging technologies more easily. Cloud computing and hardware agnostic mobility are driving this change. SOA, data center consolidation, and data management are enablers.
·         Increasing Efficiency – Agencies are seeking ways to improve operational efficiency and increase employee productivity while at the same time reducing costs.  Mobility and Big Data are two factors forcing this change.
·         Enterprise Services – Agencies are moving from IT environments characterized by system-specific siloes to environments based on services oriented architectures that emphasize system interoperability and the ubiquitous availability of data. This transition toward enterprise services is not only breaking system specific siloes, it is also changing the way agencies invest in and utilize technology solutions.  Shared services, cloud computing, and network computing are examples.
·         Accelerating Innovation – Agencies are introducing standards-based common operating environments (COE), adopting data-centric policies, and turning toward services oriented open architectures to increase the agility of their IT environments. This enables them to leverage innovative new technologies, such as cloud computing, mobility, and Big Data more rapidly.
·         Consolidating Acquisition Avenues – Agencies are being pushed by OMB to drive down the cost of buying commodity IT products.  Agency CIOs are establishing strategic sourcing contracts or turning to GSA vehicles to consolidate commodity IT acquisitions. Agencies with long standing sourcing programs already in place are relying more heavily on these contracts, while agencies without established programs are taking steps to introduce them within the next one to two years.
Conclusion
To the degree and speed that these game-changing trends fundamental change the federal IT landscape, they could cause a shake-up in the federal IT competitive environment which will hit unprepared hardware vendors especially hard.  If the trends bring about fundamental change in the federal landscape too slowly and the fiscal pressures continue unabated, the future scenario will be even more dire and disruptive. 
Hardware vendors selling in the federal market need to adjust what they offer and how they sell to federal customers.  Cloud computing, thin-client adoption, mobile computing, and enterprise services will transform the hardware market and present both challenges and opportunities for hardware vendors. Hardware vendors need to be determining and implementing go-forward strategies now that will keep them viable in the federal market into the future.
About the Report
Our Federal Information Technology Hardware Market, 2012-2017 report provides companies with a detailed view of the future federal IT hardware market and a market forecast for the next five years. It includes forecasts for the federal hardware market overall and the following technology segments:
·         End-User Devices
·         Storage and Peripherals
·         Infrastructure (Servers and Mainframes)
·         Communications and Network Equipment
It also includes hardware profiles for the top ten agencies with agency drivers in each of those technology segments. The report is designed to enhance a vendor’s federal planning process with relevant strategic analysis and provides recommendations that guide hardware vendors to maximize their market positioning to best take advantage of the changing federal IT environment.

 

Federal Software Market Forecast Indicates a Contraction is Ahead

Last week, we released a new report, Federal Software Products Market, 2012-2017, where we delve into the driving trends and challenges that will shape the size and direction of the federal software marketplace for the next few years and beyond. What strikes us about this particular segment is the combination of market forces at play that are transforming the landscape and strongly impacting what, how much and how federal agencies will purchase and manage their software portfolios now and in the future. 
In the report, we discuss several near-term trends that we see in the federal technology market coalesce around several key areas:
  • Agencies are looking for was to shift to managing data versus infrastructure.
  • Drive to maximize efficiency is accelerating the move toward automation and analytics.
  • Increase of mobile computing progresses in tandem with 24/7 demand for information access.
  • Operational models are shifting towards services, placing greater emphasis on acquiring and expanding capabilities through managed services (SaaS, communications, security).
  • Push to accelerate innovation and technology adoption, like automation and analytics.
  • Agency strategies of moving towards common operating environment and standard enterprise architecture will leverage economy of scale, and require consolidation of acquisition avenues (contract vehicles/BPA).
Given these and other trends, there are several positive market drivers helping to sustain the federal software segment and numerous negative inhibitors that will suppress federal spending, and therefore growth. Here are just a few we recognize.
Market Drivers
  • Pockets of sustained spending on custom software developments, particularly in the sciences and high performance computing.
  • Business system modernization and standardization will insulate certain software investments.
  • Software is at the core of priority systems for defense spending. Similarly, VA and HHS are driven by iEHR and other major systems heavily reliant on software
  • Continued demand for software will be augmented by a push for COTS and standardized/enterprise solutions.
  • Cyber security is expected to be a growing mission area for agencies. Security software spending and automation will enable personnel to focus on complex security issues.
Market Inhibitors
  • Integration and consolidation efforts will be ongoing in the near term, maintaining software funding. Then (after FY14) savings start to be realized, lower spending levels.
  • Push for standardization is expected to increase implementation of COTS and enterprise solutions, lowering long term costs.
  • Rationalization of Defense applications will contribute downward pressure in Defense software spending.
  • Strategic sourcing initiatives are enabling agencies to leverage cost saving through negotiated prices and economy of scale.  
Deltek’s Federal Software Forecast
As a result of these trends, drivers and inhibiters, Deltek forecasts demand for vendor-furnished software products by the U.S. Government will decline slightly from $13.5 billion in 2012 down to $13.3 billion in 2017 at a compound annual growth rate (CAGR) of -0.2%. (See chart below.)
 
 
 
Implications
  • Agencies will be pressured to make “controlled cuts” to “near-sequestration” levels regardless of whether or not sequestration actually occurs.
  • Agencies are moving toward cloud computing and mobile computing in a drive to maximize efficiency and adopt innovative technologies while also reducing costs.
  • Enterprise licensing and strategic sourcing will reset software expenditure levels to new baselines as agencies fully implement new policies and rationalize their software portfolios.
  • Standardization and modernization of both infrastructure and enterprise software will consolidate acquisitions, but drive growth in key areas such as mobility and cybersecurity.

 

Digital Government Strategy Designed to Catch Up to Our Mobile World

Wednesday, August 8th, at the Federal Mobile Computing Summit in Washington, DC, Dave McClure, Associate Administrator of GSA’s Office of Citizen Services and Innovative Technologies, talked about the future of the federal Digital Government Strategy and encouraged agencies to think boldly and be innovative as they devise mobile means for delivery of information and citizen services through thier digital strategies. The stage is being set for the next wave of the Information Revolution, which portends to be much more transformative to peoples’ lives than the Internet wave of the last 10 years.
He emphasized that under the Digital Government Strategy, they are devising a twelve month roadmap with frequent milestones (30 days, 60 days, 3 month, 6 and 9 month). Those milestones will pave the way for one quarter to one third of agencies’ websites will be in mobile-friendly formats. And that will just be the beginning of moving website as well as a wealth of other agency data-holdings to mobile environments in a world where information will really become a critical asset. Over the next 5 to 10 years, the focus will be on data, which will be the “core ore” that can be turned into actionable knowledge that can be used to change lives.
The aggressive strategy is driven by anticipated “citizens’ demand for high-quality communications, services, and transactions delivery on their terms anytime, anywhere, and on any device,” McClure said.
However, there are many issues and challenges that must be addressed and overcome relating to both procurement of mobile devices and services and management of mobile devices and, especially, data on those devices.
To address those commonalities, GSA has stood up the Digital Innovation Center as a lightweight, slim staff, highly collaborative center where subject matter experts can be pulled in as needed to address policies, issues, and challenges. The focus of the center is on “build-once and use many times” in government-wide or multi-agency setting. And that mantra goes for all aspects of enabling mobility, including: 
BYOD policies and common device management policies;
·         A mobile and wireless security reference architecture;
·         Building shared development platforms for mobile apps; and
·         Creating contract vehicles that can be used government-wide.
They are focused, also, on early performance analytics and tools to be used to determine:
·         How citizens interact with government and how to enable access to valuable in-demand services and data designed to enable a high-quality user experience
·         Common open source content management systems for uniformity of experience on all government websites, and
·         Creation of web APIs to open data up to be shared and used by many inside and outside of government
The center is emphasizing rapid productivity and has set up five innovation teams which are required to devise innovative solutions in 6 months for delivery of citizen services and transactions. Vendors should track what these teams are doing carefully as they are setting the stage for the next wave of the Information Revolution, which portends to be much more transformative to peoples’ lives than the Internet wave of the last 10 years….and, like most things these days, this one is accelerating and coming at us faster than ever.

 

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