Top Five Trends in the Federal IT Market

Although the U.S. economy faces an uncertain future, the federal government is likely to keep on spending big on technology, according to a panel at the FOSE Conference and Exposition, the government IT exposition in Washington, D.C.

The panel, addressing the issue of "The Future of Selling IT Products and Services to the Public Sector Market," included representatives of Lockheed Martin, solution provider GTSI, systems integrator EDS, and solution provider SRA International. It was organized and moderated by ChannelWeb's Craig Zarley.

Here are some of the top trends government VARs should be aware of.

1. Global opportunities

In developing countries on the African continent and around the world, federal aid programs and nation-building initiatives provide a host of opportunities for solution providers. "We're looking for the reach of companies that go beyond U.S. borders," said Paul Mrochinski, director of U.S. Government Alliances & Partners, EDS. "We've set up communities of practice where we can and have taken small business organizations into international opportunities because of the capabilities they have."

On February 6, 2007, President Bush directed the creation of U.S. Africa Command (AFRICOM) to better address the needs of African countries and provide a base of support combating disease and improving infrastructure. Mac DeShazer, Lockheed Martin's senior manager and small business liaison, said many opportunities for solution providers exist through AFRICOM, like putting communications systems in place for dealing with malaria, tuberculosis and HIV. "Lockheed Martin has a fairly significant presence on the continent," DeShazer said. "We are looking at AFRICOM as an entry point toward getting to other markets."

2. Security Staying Strong

The demand for cyber security remains strong in the federal market, said Mike Fox, senior vice president of marketing and sales for SRA International. "The need for information security professionals is at an all time high," he said. "It's virtually impossible to fill all the positions needed." Threats from viruses, hackers, and attacks on infrastructure require constant attention, and as trends like virtualization continue the need for federal security solutions is expected to remain vigorous. "I agree it's a huge area," said Mrochinski, pointing to ID management as another security that will grow along with access management. "It's something we are looking to expand from a federal government opportunity into the state and local space as well."

3. Going Green

Green computing was a hot topic at this year's FOSE conference in Washington, and as government agencies implement programs like Epeat, a TK, solution providers can leverage their use of more efficient and environmentally friendly technologies -- and give Mother Earth a helping hand at the same time. "It's a very interesting topic and it seems to be multi-faceted, from turning off lights to how [agencies] operate their computing environment," said Mohamed Elrefai, vice president of the Enterprise Solutions Group at GTSI. "The focus has been more on the products versus the operation of those products like peak utilization versus low-level activity."

Fox said federal agencies are looking for ways to reduce their carbon footprint and said he believes it's a movement that will only gain momentum in the years ahead. "It should definitely be taken into account," he said. "It's not driving a lot of projects yet, but we're on a major trend toward something important."

4. End-to-end-solutions

While the panel found common ground on a majority of issues, when the subject of providing end-to-end solutions was broached, sentiment on the viability of offering end-to-end solutions varied. "There's been a shift in state and local with focus on end-to-end solutions," said Mrochinski. "We try to facilitate an end-to-end solution process." For government agencies, he said, it's not simply about brining in the IT asset -- it needs to address the business mission.

DeShazer agreed with Mrochinski and said the trend at Lockheed Martin was to focus on putting together complete solutions. "More and more we find that's the customer's expectation," he said. Fox, on the other hand, pointed out it is difficult for government agencies to be able to buy complete end-to-end solutions. "I advise my folks when selling to the government, be able to articulate the solution so they see the complete end-to-end solution," he said. "No one's really empowered to buy that complete solution."

Another complicating factor is the recent failure of large-scale complete solutions projects like the Coast Guard's Deepwater fleet debacle. "It will be going a bit slower around the mega solution contracts," he said. "With these big 'solve the world' problems, it's unrealistic to expect one company, or even one team, to do it all."

5. Administration Change Could Trigger Slowdown

Fox noted one interesting an unusual trend that solution providers and vendors will be dealing with come this fall. Because this is an election year in which no incumbent will be returning to the White House, the federal government is going to go through a major transition that could trigger a slowdown in IT spending. "Everything is going to happen between now and the end of the government fiscal year on September 30," said Fox. "This is the time to bulk up."

"We could be looking at a year or maybe longer before the business starts to pick up again," he said. Even though Fox calls the D.C. area "basically a zero unemployment" location, the tumult created by the presidential election, no matter who wins, will directly affect VARs who sell to the government. This is also the first time in recent history when an executive election bridges a war, Fox noted. "Keep an eye on that, because it will have implications on our business," he warned.