U.S. federal government spending on telecom, applications, outsourcing, services, support, network hardware, computer hardware and IT personnel will grow about 5.6 percent in 2009, after growing about 5.3 percent in 2008, representing about $80.6 billion worth of spending, says Compass Intelligence. The annual growth rate in 2007 was 6.5 percent.
By 2012, the federal government will spend $98.5 billion on IT goods and services, Compass Intelligence says. Initiatives to support a mobile workforce, E-government, a high-tech military, cybersecurity and green technology are among the federal spending priorities. "Federal government IT spending is expected to remain rather steady, despite economic conditions," says Stephanie Atkinson, Compass managing partner.
Application spending is expected to be the fastest growing segment, experiencing annual growth between 8.6 and 9.8 percent. Telecom services spending will be driven by wireline data, including IP telephony and broadband services, as well wireless data investments.
The Defense segment represents about two thirds of total Federal Government IT spending.
Suppliers not already certified to sell to military and federal agencies may miss the direct opportunity, though. It takes time to build the relationships and supply the features required by many federal agencies, and none of that can be done fast.
On the other hand, some suppliers will benefit from indirect federal spending, as they will receive tax credits or grants as part of a government stimulus package starting in 2009, though.
The caveat is that most, if not all of that support will go to facilities-based service providers with access networks. In many cases, those recipients also will be "carriers of last resort."