Federal Knowledge Management Market to Reach $1.3 Billion by 2010

With Katrina showcasing just how little the federal government has come in data sharing since 9/11, the knowledge management market is expected to increase 35 percent over the next five years, according to a report released by Input, a Reston, Va.-based research firm.

"The federal government thought it made progress in this area, but Katrina really opened its eyes," says Chris Campbell, senior analyst of the federal market at Input. "The lapses in interoperability are still there. It's a mess."

Given that reality check, the federal government will increase spending on knowledge management from $965 million in 2005 to nearly $1.3 billion in 2010, Input predicts. That includes money spent on data warehousing and data mining, analytical systems, and professional services that offer integration, design, training and software development in support of knowledge management applications.

More specifically, spending on equipment--servers for a data warehousing system, for example--is expected to grow from $182 million in 2005 to $233 million in 2010, while spending on knowledge management software is expected to grow from $244 million to $318 million. Professional services will see the most significant jump--from $538 million to $727 million.

"The base technology required--software, servers, databases--is generally already there," Campbell says. "The biggest percentage of spending will come from professional services, with [contractors] able to provide cookie cutter services that can be implemented across whole agencies benefiting most."

Specifics regarding what technologies and services will be needed are still being ironed out by the Office of Management and Budget, Campbell says. The proposed federal IT budgets for 2007 and definitely 2008 will likely paint a clearer picture.

The Army is already ahead of most federal agencies in knowledge management initiatives, partly due to its net-centric initiatives. For example, the Army Knowledge Online portal incorporates a classified system, containing such sensitive information as battle strategies, and an unclassified system, with such standard services as e-mail. On the civilian side, the largest program request for knowledge management related services in 2005 came out of the Department of State and was value at $24 million.

Whether other agencies follow suit will be determined by their ultimate objectives. "Does it make sense to do something like Army is doing? It might not in a lot of cases," Campbell says. "The goal for all agencies is to move more and more toward putting everything online and that's not just a matter of moving paper documents to electronic form. Now, it's a matter of being able to put them in a format that can be shared and constantly updated years down the road."