Deltek’s Federal IT Market Forecast Projects Spending Trends from 2023 to 2027

Within the context of fast-changing geopolitical and economic forces, the federal IT landscape is an increasingly complex amalgamation of future needs and current realities, as agencies seek to embrace rapid technological change while also addressing embedded legacy infrastructure. The federal IT landscape continues to evolve as agencies work to embed new capabilities – from cloud computing and cybersecurity to artificial intelligence and analytics – into their IT environments.

These are among the observations in our latest market analysis report, Federal IT Market, 2023-2027, which takes a strategic view of the government-wide market factors, policies and principal initiatives that will shape federal information technology spending over the next three years.

In its priorities, policies and budgets, the Biden Administration continues to emphasize IT modernization, cybersecurity and investments in key technologies as enablers of citizen services and critical mission objectives. This technology agenda presents broad opportunities in systems modernization and support, cybersecurity, cloud computing, data analytics, artificial intelligence, and process automation. As a mission enabler, IT is a critical part of a wide range of programs, spanning professional services, R&D, defense & aerospace and operations & maintenance activities. At the same time, agencies remain under pressure to increase efficiency, eliminate waste and demonstrate clear value for their IT investments.

Given these diverse influences, Deltek forecasts the federal IT market will continue to experience moderate but uneven growth over the next five years as agencies seek to address multiple administration technology priorities and mandates, and invest in IT capabilities that add new operational capacities and effectiveness.

Deltek forecasts federal spending on contractor-supplied Information Technology (IT) products and services will grow from $116.4 billion in FY 2023 to $137.5 billion in FY 2027. (See chart below.)

Key themes emerging from our research include:

• Critical Technology Priorities. Agencies continue to prioritize investments in critical technology areas, including cloud, cyber, big data, AI, health IT, mobility/5G and network modernization. IC agencies are leveraging these technologies as well as modeling and simulation and virtual/augmented reality.
• Multifaceted Cybersecurity. Policies for Zero Trust, cyber data collection and sharing, vulnerability and incident response, cloud security and software supply chain security – as directed by Executive Order 14028 - are driving higher investments in cybersecurity solutions, including those that are cloud-based.
• Data-driven Government. Enterprise-scale analytics platforms have become common across the federal government and will continue to grow.
• Software Development. Agencies continue a focus on DevOps, DevSecOps, human-centered design and the use of APIs and microservices in software development practices and modernization efforts.
• Emerging Tech. The Biden Administration continues to prioritize technology R&D within agency budgets, including AI, cybersecurity, quantum, autonomous systems, networking and wireless spectrum.
• Tech Acquisitions. Training the federal acquisition workforce in technology procurement remains a challenge that has drawn the attention of Congress in legislation such as the FY 2024 NDAA.

For more details, check out Deltek's , Federal IT Market, 2023-2027.