State Department IT Forecast is for Modest Growth Through 2024
Published: August 14, 2019
The outlook for Department of State spending on contracted Information Technology (IT) over the next five years shows signs of very modest growth.
In Deltek’s recently released Federal Information Technology Market, 2019-2024, we forecast that spending by the State Department (DOS) on contracted IT goods and services will increase from 1.7 billion in FY 2019 to nearly $1.9 billion in FY 2024 reflecting a 2.1% compound annual growth rate (CAGR). (See chart below.)
Deltek’s forecast projects the strongest growth in communications and network services and IT services sub-segments, followed by software products and IT hardware by comparison over the forecast period.
IT Investment Drivers
Amidst organizational, fiscal, and other challenges, the relatively flat top-line spending levels will still sustain key IT priority areas such as cybersecurity, cloud computing, mobility, and IT innovation.
Stuart McGuigan is State’s new CIO as of March 2019, ending a 15-month period where State had an acting CIO. McGuigan convened a Digital Diplomacy Council of all State IT leaders to address cybersecurity and enterprise architecture. McGuigan plans to create the department’s next generation of comprehensive architecture principles and capabilities.
Current IT modernization efforts focus on developing criteria for identifying legacy systems that require modernization, developing an IT modernization plan and timeline, and migrating one of the large management systems to the cloud.
The State Department is focused on implementing a holistic cybersecurity program that addresses government-wide security mandates to protect its information resources while engaging international partners on cybersecurity issues. State’s cybersecurity budget for FY 2020 of $400M reflects 10% growth from FY 2019, the largest percentage gain among all civilian departments. To strengthen its cybersecurity posture, State plans to expand the capabilities of its Cybersecurity Integrity Center (CIC) and integrate these capabilities within its Joint Security Operations Center (JSOC) to create a joint digital security service, in partnership with its Foreign Affairs Cybersecurity Center (FACC).
State’s IT leadership sees cloud computing as a means to greater collaboration, productivity, mobility, and cybersecurity. As such, the department is sustaining investments in cloud-based efforts and services to enable scalability and extend IT infrastructure lifecycles. By 2022, State plans to transition from a “brick and mortar ecosystem” to an optimized enterprise cloud ecosystem that leverages a secure cloud architecture.
Mobile Diplomacy is a top priority since the nature of the mission requires significant activity outside of U.S. facilities. State is expanding its mobile capabilities with reliable, secure connectivity for both government and personally-owned devices.
To support “innovative diplomacy” State plans to adopt or expand use of familiar modern technologies – like voice-to-computer interfaces, Global Positioning Systems (GPS) with digital mapping, and foreign language translation services – as well as explore the potential of applying AI to those capabilities to broaden their effectiveness.
These and other areas of priority investments will continue to provide targeted opportunities for contractor-provided solutions and services within an overall atmosphere of cost containment and efficiency pursuits that will moderate top-line growth over the next five years.
Get a free report summary of Federal Information Technology Market, FY 2019-2024.