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Here Are the Top 5 Public Sector Tech Trends for FY18

AvatarWritten by | Edge & IoT, Security

By Lloyd McCoy Jr.
Department of Defense Manager, Market Intelligence
immixGroup, an Arrow company

The public sector, which includes the federal, state and local governments, could have as much as $186 billion to spend on IT in FY18. We won’t know the exact amount until a budget is approved, but signs are pointing toward a continuing resolution.

Regardless of the actual FY18 figure, the public sector is a significant market for technology companies with the right solutions and a compelling sales pitch.

Top 5 Public Sector Trends
As we close out another federal fiscal year, here are five trends to keep a close eye on going into 2018.

  1. Federal budget remains in play ‒ There is a little uncertainty with how federal budget appropriations will shake out. The last several years have taught us to expect a short-term continuing resolution followed by an omnibus appropriations bill that funds the government. I still think that’s the likeliest outcome in FY18 but there’s a chance the White House would veto a bill that didn’t include enough funding for a border wall or other administration priority. Ultimately the rest of the tech trends are secondary to whether agencies have any money to spend in the first place. Companies should also be paying close attention to a proposed piece of legislation in the U.S. House that could give federal agencies the ability to buy commercial items via online marketplaces without contracting officers having to determine price reasonableness before ordering. Think Amazon, but for the government. This bill could make a significant impact on the industry.
  2. Internet of things will catch up to commercial and state/local ‒ The federal IoT market is expected to grow 20 percent in FY18 to $3 billion. While it’s a small portion of the overall federal budget, IoT is one of the fastest growing technologies in government. Agencies are beginning to adapt solutions that have been effective for commercial and state/local governments. The IoT federal market is expected to progress more quickly in the coming years with the biggest growth in defense, energy/logistics, law enforcement/public safety, science/technology and healthcare. The Army has consistently been the biggest IoT spender on the defense side, while the Department of Transportation leads the way for civilian agencies. The Missile Defense Agency and NASA are also leading the way by developing IoT programs and working through some of the technology’s challenges.
  3. Agencies take a new approach to cybersecurityAnother big growth area is in cybersecurity. It’s been expanding in government for several years as threats become more sophisticated. One new approach for staying ahead of the bad guys is to place more oversight of cybersecurity efforts in specific components within agencies. Take the example of the Department of Homeland Security that wants to make the Transportation Security Administration responsible for assessing the cybersecurity of aviation systems, including airports and airlines. We expect to see other agencies follow suit.
  4. Federal looks for better cloud security ‒ Cloud is another technology solution that’s been a focus of federal agencies. However, the vast majority of government entities are still afraid to move critical assets to the cloud because of privacy concerns. We expect agencies to start looking for solutions in attribute-based access control and tools that give departments better analysis and visibility of their data. Another major cloud-related trend to watch is how agencies are approaching shared services and prioritizing duplicative and legacy applications.
  5. State and local government and education (SLED) ‒ The major development to watch in the SLED market is the consolidation of IT spending, purchasing, infrastructure, software and everything that includes personnel. More and more state and local governments are moving their IT assets under one roof. It enables them to see the whole picture ‒ soup to nuts ‒ of their IT enterprise, which allows them to make better strategic decisions. They also gain efficiency from less duplication and can use those savings to drive more innovation in IT. While consolidation could be less than good news for the industry; showing state and local governments that you are a true partner, will work with them through their consolidation efforts and will demonstrate real ways to provide savings and efficiency can result in big rewards for tech suppliers in the long run.

Want to hear more on public sector IT trends? Register for immixGroup’s 4th Annual Government IT Sales Summit. Learn more!

Last modified: September 24, 2019