Federal Information Technology Market, 2018-2023

Deltek forecasts federal spending on contractor-supplied Information Technology (IT) products and services will grow from $104.2 billion in FY 2018 to $116.4 billion in FY 2023 at a compound annual growth rate (CAGR) of 2.2%.

The IT sector is at a transformative point in the federal government. Framed by the Trump Administration’s IT management agenda, government-wide focus will be on data utilization as an enterprise asset, improved citizen services and streamlining IT acquisitions, all of which rests on an ambitious IT modernization plan. Cybersecurity, cloud computing and data analytics continue to be key mission areas that continue to grow within the federal IT space. The Bipartisan Budget Act of 2018 raised overall IT budget baselines, however, agencies must still work to increase the efficiency of their operations and eliminate waste, fraud and abuse. Deltek forecasts the federal IT market will show modest growth over the next five years as agencies establish strategies to successfully manage competing priorities and streamline costs.

Key Findings

Federal IT Modernization – The convergence of the new Technology Modernization Fund, GSA’s Centers of Excellence, the IT Modernization guidance and the transition to the Enterprise Infrastructure Solutions (EIS) contract set the stage for contract opportunities in cloud computing, cybersecurity, IT infrastructure upgrades and other areas.

Defense Priorities– Higher-than-expected budgets will allow DOD to regain ground in areas previously underfunded. DOD is working to improve force readiness, close capability gaps in cybersecurity, ISR and unmanned systems, cloud computing, and weapons systems platforms (which include some IT), and invest in game-changing technologies such as artificial intelligence and cyber warfare solutions.

Category Management – The administration is leveraging Category Management principles to better leverage the federal government’s buying power. Agencies will be under scrutiny to funnel an increasing amount of IT spending through established Best-of-Class contracts to take advantage of pricing standardization.

Emerging Technologies – The demand for artificial intelligence and machine learning capabilities to improve processes, assist in better decision-making and improve global competition will continue to grow, spurred by administration-backed policy. Technologies such as blockchain are being piloted by agencies but still considered years away from extensive adoption.

Critical Insight for Vendors

Deltek's Federal Information Technology Market, 2018-2023 report takes a strategic 5-year look at the trends, drivers, and inhibitors shaping federal information technology procurement. The scope of Deltek’s analysis includes traditional IT and embedded IT spending within non-IT programs.

The report provides:

Insight into the factors, policies, and technologies shaping the market landscape over the next five years.

Insight into the dynamics shaping IT market segments and agency spending.

Insight from industry and government thought leaders.

Market forecasts to support vendors’ strategic planning.

Recommendations to help contractors evaluate the impact of trends on their businesses.

Deltek's Federal Information Technology Market, 2018-2023 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.