Nov 08, 2013 (05:11 AM EST)
Federal IT Spending To Grow Slightly In 2014
Read the Original Article at InformationWeek
new spending forecast released Nov. 5.
A triumvirate of technology trends -- big data, cloud and mobility -- will drive much of the new IT and software spending as agencies seek to meet budget targets through cost savings and make major leaps in operational efficiency, according to the research firm immixGroup of McLean, Va.
The president's federal IT budget request in for fiscal 2014, released in April, totaled $82 billion, which is a 1.8% increase over the previous fiscal year, the forecast states. However, that number could fall to $78 billion ($40 billion for civilian agencies and $38 billion for defense and intelligence agencies) if the nation goes through another round of sequestration, ImmixGroup analysts said.
Among the factors behind the IT forecast is the continuing resolution passed in October, which approved $986 billion in discretionary funding for agencies through January 15, 2014 -- $500 billion for defense agencies and $486 billion for civilian agencies, the forecast states. The total is $19 billion more than post-sequestration caps set by the Budget Control Act (BCA).
While the approved funding levels are below President Obama's fiscal 2014 budget request in April, they are above the sequestration caps set by the Budget Control Act, the research firm said. Unless Congress can produce a deficit reduction plan, which it has failed to do for the past three years, or unless they amend the Budget Control Act, the nation will face another round of sequestration in fiscal 2014.
Agencies will continue in fiscal 2014 and subsequent years to invest heavily in cloud technologies as they seek to reduce their data center and IT infrastructures and move toward enterprise services, the forecast states.
The immixGroup's findings are similar to a multiyear forecast in October from TechAmerica, which predicts federal IT spending will grow 2.3% annually, from $70 billion projected in fiscal year 2014 to $78.5 billion in fiscal 2019. Federal IT spending forecasts by research firms vary depending on the methodologies used to produce the forecast. For example, some firms use Office of Management and Budget spending estimates while others rely on compound annual growth rate.
TechAmerica's forecast warned contractors that they are likely to see defense and civilian agencies shift their spending toward commodity IT products, as reflected in the rise of lowest price technically acceptable contracts.
A major challenge for defense agencies is to find efficient ways to manage, tag, store and access the vast amounts of data they gather on a daily basis, said Tim Larkins, an immixGroup analyst. "Storage, business intelligence and business analytics, high performance computing, enterprise search and data management tools will all be important investments," he said.
Each of the military services and the Defense Information Systems Agency (DISA) has at least one massive project or initiative that requires a mix of big data, cloud and mobile technologies, the forecast states. Defense agency and military service enterprise IT projects that are tapping heavily into key emerging technologies are Army's Warfighter Information Network-Tactical, Navy's Next Generation Enterprise Network, Air Force's tactical data links, and DISA's Global Command and Control System. In addition, the DOD's Joint Information Environment also requires these emerging technologies.
DOD will continue to harness the cloud to help it with virtualization, data center consolidation, network management and application rationalization, the forecast states. In addition to big data and cloud-related spending, defense agencies also are ramping up their spending on mobile technologies and mobile security, the forecast states.
Like defense agencies, civilian agencies also are struggling with how they can better process large amounts of structured and unstructured data in the course of daily operations, said Tomas O'Keefe, an immixGroup analyst.
O'Keefe expects civilian agencies will be seeking business intelligence, analytics and knowledge management tools for their business operation. Civilian agencies also require key cloud technologies to reduce their data center and IT infrastructure footprints, he said.
The State Department intends to develop its current IT backbone and plans to serve as a cloud broker for other federal agencies with personnel deployed overseas, the forecast states.
In the realm of big data, the Treasury Department has a need for advanced analytics for the IRS's Return Review Program, and the Veterans Affairs Department needs big data to improve information sharing with the DOD and private healthcare providers through the development of the electronic health record system.
What continues to remain problematic for defense and civilian agencies alike are the policy challenges associated with the expanded use of mobile devices. Nevertheless, agencies with personnel widely dispersed geographically, and those agencies that wish to promote telework, know that they must develop a sound mobile device policy that addresses such major sticking points as bring-your-own-device.
"Many agencies have embraced telework to one degree or another, "O'Keefe said, "but the next generation of mobile collaboration tools are waiting for federal policy to catch up to technology."