Federal IT spending expected for slight growth in next 5 years

Thursday, August 04, 2011

According to a recent Deltek forecast, federal information technology spending is projected to increase at a modest rate of less than 2 percent annually between 2011 and 2016.

The key driver leading the slight increase in IT budgets is the pressure for agencies to cut costs, and technology will play a critical role in this development. Technologies that promote efficiency and reduce costs will be the top investments for federal agencies in the next five years, according to Deltek.

"While the administration is still focused on key cost-saving measures such as cloud computing and data center consolidation, agencies will be under pressure to execute those plans under strict budgets," said Deniece Peterson, senior manager of federal industry analysis at Deltek.

Peterson also said companies looking to capitalize in the next five years must be "more strategic and demonstrate strong operational performance."

Cloud computing is expected to help federal agencies cut costs and boost efficiency. According to research firm Gartner, worldwide public cloud services spending is projected to reach $89 billion this year, with overall IT budgets reaching nearly $3.7 trillion, increasing 7.1 percent from 2010.