Solution providers who sell into the public sector are seeing plenty of opportunity thanks to increased government IT spending. But with that opportunity has come new competition, thanks to an influx of VARS and integrators that moved to beef up their government and health care sales following a year of economic turmoil in the commercial sector.
With a suddenly more crowded public sector arena itself beset by government contract consolidation and other budgetary pressures, public sector VARs need to sharpen their attacks. That was among the key messages heard Wednesday during opening sessions at Tech EDG, Tech Data's public sector-focused conference taking place this week in Arlington, Va.
"There are new competitors in this marketplace because there are a lot of dollars being spent there, as we can see," said Murray Wright, Tech Data's President, the Americas. "We also can't be confident that government spending is going to continue at the same rate as it is now."
Wright cited data from government IT researcher Input putting this year's estimated government IT spend at $142 billion, with $79 billion pegged for federal government spending and $63 billion for state government, local government and education (or SLED) spending.
Tech Data's own public sector numbers have reflected the government's healthier spending habits, Wright said. Public sector business now accounts for 21 percent of Tech Data's U.S. revenue -- up 8 percent year-over-year, he said. In fiscal 2010, Tech Data completed 7,754 government bids -- up 45 percent, year over year -- with 485 solution providers.
"We think there's still room to grow," Wright told an audience of about 100 VARs Wednesday. "We think there's greater capacity and a greater level of opportunity."
Among key categories to watch for government spending, Wright cited unified communications, wireless and mobility, network security, video surveillance, broadband, telepresence, virtualization, storage and digital signage.
Green technologies and managed services were also more important to public sector procurement than ever before, he noted.
Wright, who was named Tech Data's President, the Americas, last week, urged VARs and integrators practiced in selling to the public sector to redouble their efforts if they want to stay ahead of the broader interest in public sector sweeping across the channel.
"Opportunity does not knock, it presents itself when you beat down the door," Wright said. "I'd like to go and beat down some new doors with you."