How Small Businesses are faring in the Federal Big Data Market

Deltek’s GovWin Federal Market Analysis team is deep into analyzing procurement data for its upcoming Federal Priorities: Cloud, Big Data, Mobility, and Data Center Consolidation report due out at the end of October. The data we’re examining has revealed interesting insights, some of which I’ve presented in a series of recent articles on cloud computing. This week turns attention toward big data and some of the trends that analysis of acquisition data is showing. The trend to be examined here is federal spending on big data solutions procured from small businesses.

The chart below shows total federal big data spending by business size from FY 2013 to FY 2015. Spending has risen nicely from year to year and within this space small business has more than held its own against larger competitors, receiving 44% of agency obligations in FY 2013, 45% in FY 2014, and 45% in FY 2015. Agency spending on advanced analytics accounts for a majority of the obligations directed at small businesses, followed by analysis support services. So, basically, the sale of analysis software to federal agencies is driving spending with small businesses.

Now let’s take a look at the small business totals broken down by socioeconomic category.

Small businesses classified as 8a lead the pack when it comes to total spending, earning $59M in FY 2013 and $68M in FY 2014. In FY 2015, however, ordinary small businesses (i.e., those not listed under a specific socioeconomic category) earned the most with $108M in obligations. This total puts ordinary small businesses in second place for overall obligations earned. In third place are Small Disadvantaged Businesses with a total of $148M earned over three fiscal years.

Lastly, here is a look at the analytics capabilities small businesses have been selling. I’ve represented these in aggregate by solution, rather than by fiscal year.

Agency purchases of SAS analytics led the market in FY 2013 ($34M) and FY 2015 ($44M) while purchases of Palantir led in FY 2014 ($27M). The capability that saw the strongest percentage growth in agency purchasing is Splunk, spending on which equaled $5.3M in FY 2013, rising to $30M in FY 2015.

Several years ago, Deltek FMA forecast that agency spending on big data solutions would continue to grow despite tight budgets. This serves as an example of a niche market in which we see areas of opportunity within an overall flat IT market space. In addition, small businesses have managed to ride growth in big data spending just as well as large businesses have. We believe both of these trends – growth in big data spending and in small businesses’ share of that spending – will continue for the foreseeable future.