Federal Information Technology Market Landscape, 2022-2024

Deltek forecasts federal spending on contractor-supplied Information Technology (IT) products and services will grow from $118.5 billion in FY 2022 to $130.4 billion in FY 2024.

In the midst of a complex economic and geopolitical environment, the federal IT landscape is a multifaceted combination of rapid technological change and entrenched legacy infrastructure. The U.S. Government faces the challenges of persistent cybersecurity threats and the lingering impacts of the COVID-19 pandemic while modernizing their IT infrastructure and pursuing new technologies. These and other challenges are driving government-wide IT policies and initiatives that impact both federal IT operations and IT transformation and modernization priorities.

In its budgeting and policies, the Biden Administration continues to emphasize IT modernization, cybersecurity and investments in key technologies as critical mission enablers, presenting opportunities in systems modernization, cloud computing, cybersecurity, artificial intelligence, data analytics, and automation. As a mission enabler, IT is a critical part of a broad range of professional services, R&D, defense & aerospace and operations & maintenance programs. Agencies remain under pressure to increase efficiency, eliminate waste and demonstrate clear value for their IT investments.

Deltek forecasts the federal IT market will continue to show moderate growth over the next few years as agencies continue to emerge from the COVID-19 pandemic, shore up vulnerabilities exposed by major cyber-incidents, and invest in IT that adds new operational capabilities.

Key Findings

• IT Remains a Priority Enabler. Agencies continue to prioritize investments in critical technology areas, including cloud, cyber, big data, AI, health IT, mobility/5G and network modernization. Vulnerabilities exposed during the COVID response add focus and urgency.
• IT Modernization Focus. Agency focus on IT modernization remains high due to additional funding and process changes in the TMF. However, agencies must largely rely on traditional IT budgets to make significant progress.
  • Migrating legacy systems to the cloud and/or purchasing cloud-based capabilities is now agencies' de facto approach for modernizing IT environments. However, many agencies must still address application rationalization, security and governance.
• Top-down Cyber Priorities. Progress on directives from the May 2021 Executive Order 14028 touch broad areas across the federal cybersecurity landscape. Policies for Zero Trust, cyber data collection and sharing, vulnerability and incident response, cloud security and software supply chain security affect agencies and contractors alike.
• Modernized Software Development. Agencies are shifting to DevOps, DevSecOps, human-centered design and the use of APIs and microservices in software development practices and modernization efforts.
• Vendor Cybersecurity Scrutiny. DOD's revised Cybersecurity Maturity Model Certification (CMMC) program has extended its timeline while maintaining its focus on NIST standards. Progress depends on the pace of updating federal regulations implementing CMMC requirements, anticipated to finish by mid-2023.
• Funding Tech Research. The Biden Administration continues to prioritize technology R&D within agency budgets. Funding will be used to support cloud migration, build zero trust architecture, advance artificial intelligence implementation, shutter legacy systems and build out multi-domain operations.

Critical Insight for Vendors

Deltek's Federal Information Technology Market Landscape, 2022-2024 report takes a strategic 3-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 three 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 Landscape, 2022-2024 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.

Deltek's New Forecast Features

Forecast Report Series

This is the first in Deltek's new three-part Federal IT Market forecast series, designed to provide a comprehensive view of the overall federal IT landscape as well as deeper agency level analysis.

• Federal Information Technology Market Landscape, 2022-2024
• Federal Defense and Intelligence IT Market, 2022-2024 (July 8, 2022)
• Federal Civilian IT Market, 2022-2024 (July 8, 2022)

New Forecast Segmentation

Deltek has revised its forecast segments to align with the federal Technology Business Management (TBM) framework. This revision allows us to align our forecast and market segmentation with the taxonomy and mechanisms used by federal agencies to categorize their IT programs and activities. See the report Scope and Methodology for more detail.