MA

Federal Big Data Market Set to Expand

Published: November 01, 2017

Big DataForecasts and Spending

Despite a slight, recent slowdown in spending within the federal big data market, investment by agencies is anticipated to grow in the forthcoming years due to influences of policy, R&D trends and key technologies.

The Federal Priorities Spotlight: Big Data report released by Deltek’s Federal Market Analysis team examines key trends and drivers of the federal big data space and potential impacts on the future of big data spending in government.

Sometimes referred to as the “backbone” of an organization, big data is widely viewed by federal agencies as a means to modernize security capabilities, facilitate citizen services and help achieve successful mission outcomes. Total big data spending rose 19% between FY 2014 and FY 2016, from $685M to $815M, with a slight 1% drop from FY 2015 to FY 2016, primarily due to a decline in distributed computing at DoD.  Deltek identified several drivers defining the growth of the big data market.

Policy

Several policy initiatives throughout the government are driving agencies to utilize big data and analytics. For example, the OPEN Data Government Act is a proposed legislation that calls for agencies to publish data in a standardized, machine-readable fashion. If enacted, the law would prompt agencies to utilize big data tools for implementation. Furthermore, agencies have begun the required reporting instituted under the DATA Act of 2014 for federal spending data in a common format, leading to a need for analytical tools to handle the volume and complexity of these data sets.

Chief Data Officers

The number of chief data officers (CDO) throughout the federal space continues to grow. While larger organizations such as DoD, DOJ, State and DHS still lack a CDO, smaller agencies within them such as FEMA, USMS and DLA are instituting chief data officers to help develop and implement data strategies. In fact, the Army and Air Force recently created CDO positions and the Navy is currently planning for a CDO. The chief data officer position has reaches to the executive level and connects with those inside and outside the organization to become a “change agent” of sorts, likely to influence the big data opportunities within their respective agency.  

Research and Development

Research and Development, particularly investments in high performance computing, drive participating agencies to invest in big data tools and services to enhance mission successes.  In its annual supplement to the President’s budget, the Networking and Information Technology Research and Development (NITRD) program identified $4.4B in research and development dollars from the FY 2018 budget. Of that, $2.6B was identified in program component areas that contain the largest big data-related research and development initiatives.

Artificial Intelligence

Emerging technologies, particularly artificial intelligence (AI) and its subset, machine learning, utilize big data to automate analytical methods and allow machines to “learn” on their own. At its earliest stages, defense and some civilian agencies have started using AI/machine learning in areas of data security and privacy capabilities, faster and deeper decision-making, identification of fraud and predicting trends.

Challenges

Several challenges may slow growth in the implementation of big data and analytical initiatives throughout the federal market. Areas in personnel such as cultural resistance and lack of technical expertise are hurdles federal agencies continue to face. Additionally, technical difficulties such as storage of large and diverse volumes of data, interoperability between different systems and of course, security of the data are causes for slow adaption to big data and analytical projects.

As such, Deltek forecasts the demand for big data products and services will grow from $2.3B in FY 2017 to $3B in FY 2022 at a Compound Annual Growth Rate (CAGR) of 7%.

Further analysis of key drivers, spending and forecasting of big data in the federal space as well as agency-by-agency observations on big data investments and initiatives, and more, are contained in the newly released Deltek report.  Please refer to Federal Priorities Spotlight: Big Data for additional information.