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Kevin Plexico Sr. Vice President, Research and Analysis Services INPUT. Federal IT Forecast, 2010-2015. August 2, 2010. Agenda. Scope and Methodology Trends and Drivers Budget Environment Performance and Accountability Human Capital Technology Priorities Acquisition Trends - PowerPoint PPT Presentation
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Copyright ©2010 by INPUT. All rights reserved.
Kevin PlexicoSr. Vice President, Research and Analysis ServicesINPUT
August 2, 2010
Copyright © by INPUT. All rights reserved. 2
Scope and Methodology
Trends and Drivers• Budget Environment
• Performance and Accountability
• Human Capital
• Technology Priorities
• Acquisition Trends
Technology Forecast
Conclusions and Recommendations
Agenda
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Scope and Methodology
3
U.S. federal information technology (IT) spending FY2011 budget request• Includes
Executive branch
Legislative and Judicial branch
Intelligence Community
Government-owned corporations
• Excludes
Embedded computer systems
IT grants to state governments from HHS and USDA
INPUT bases its analyses, segmentation, forecast, and conclusions on:• President’s FY2011 budget request and
supporting documentation
• FY2011 OMB A-11 circular and Exhibit 53 Information Technology budget artifacts
• Individual Departmental FY2011 budget plans
• Historical data on federal spending on programs and technology
• Economic forecasts for GDP & discretionary spending
• Analysis of agency plans and INPUT Opportunities Database
• Interviews with agency officials and industry experts
Scope Methodology
Copyright © by INPUT. All rights reserved.
INPUT Survey Methodology
4
Survey Methodology•One-on-one telephone interviews with industry and government technology professionals• Web-based surveys targeting industry and government technology professionals•Respondents assured that all responses to be reported in aggregate
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Trends and Drivers
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Federal Outlays as a Percentage of GDP
Source: CBO; Bureau of Economic Analysis; INPUT
World War II
Korean War
Vietnam War
Defense Build-Up
CB
O E
stimates
Budget/Policy
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Technology Budget Request
7Budget/Policy
Source: FY2011 OMB’s Report on Information Technology (Exhibit 53)
Total IT Budget Request: $79.4BOverall Percent Change: -1.6%Total IT Budget Request: $79.4BOverall Percent Change: -1.6%+3%
+7%-63%
+33% +25.4%-5%
-2%
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Obama Policy Priorities and Impact on Technology
8
Energy/ Conservation
Cybersecurity
Healthcare
Broadband
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Health IT Funding Ecosystem
9
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Cloud Computing
10
Cloud Computin
g Evolutio
n
FEDRAMPCentralized security certifications service
FEDRAMPCentralized security certifications service
SAJACCUse case validation of cloud offerings as an interim “standard”
SAJACCUse case validation of cloud offerings as an interim “standard”
BUDGET REQUIREMENTSCloud computing
alternatives analysis within the budget
process
BUDGET REQUIREMENTSCloud computing
alternatives analysis within the budget
process
Technology
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Data Center Consolidation
11Technology
Data Center Network(Not Included in
Analysis)
Data Center Hardware Assets
Virtual Private Networks
Wide Area Networks
Switches, Routers, Firewalls
Local Area Networks
Physical Servers / Mainframes
Racks, Shelving and Cable Plant
Data Center IT Facilities and
Energy
Power Management & Distribution
HVAC / Cooling and Energy Consumption
High Speed Local Networks
Data Center IT Geographic
Location & Real Estate
Geographic Location of Data Centers
Building Leases, Available Floor Space
Power Source & Alternative Power Supplies
Data Center IT Software Assets
Applications, Platforms, Services
Middleware» Database Servers
» Web Servers
» Application Servers
» Message Queues
» Directory Services
» Other Middleware VMs
Physical Storage / Network Storage
Special Purpose Hardware
Op
eration
s & M
anag
emen
t
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Federal Spending Continues to Outpace Available Workforce to Manage and Implement
Source: OPM, OMB, INPUT
Human Capital
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Major Acquisition Reform GoalsSave $40 billion in contract spending - • Reduce contractor spending by 7% (3.5% in
2010 and in 2011) by identifying wasteful, inefficient, or ineffective programs.
Increase contracting transparency • Reduce the combined use of ”high-risk
contracts,” e.g. no-bid contracts and cost-based contracts, on new contract actions by 10% (over FY08 baseline).
Insource “inherently governmental” work • Clarify “inherently governmental” and consider
in-sourcing.
Increase the acquisition workforce • Grow the acquisition workforce by 5% and
increase expertise.
Centralize IT acquisitions• Centralization of key IT services
• Federal eMall for smaller purchases
13Acquisitions
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Spending on Task Order-based Contracts
14
Source: FPDS, INPUT
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Recent Developments
15
Cut 5% of FY12 discretionary budgets
Freeze on financial system modernization projects with $20M+ in planned spending
IT project reviews
Assessment of IT procurement and management practices
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Technology Forecast
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Source: OMB, INPUT
FY10 figures are OMB estimates.*Enacted**Assumes 103% of FY11 request.
Only once since 1994 has actual IT spending been less than a president’s IT
budget request.
IT Budget Requests vs. Actual
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Addressable IT Forecast by Buying Segment
Source: OMB, INPUT
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Market Segment Forecast
Source: INPUT
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Conclusions and Recommendations
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There is still reason to be optimistic. Although overall government spending may contract, IT has some level of immunity for a number of reasons:• Historical spending trends
• Initiatives and objectives dependent on IT
• Slow pace of insourcing; IT expertise is a major gap for government
• Other low-hanging fruit for spending cuts (e.g. weapons systems, manual processes, non-IT professional services, physical security, etc.)
“Near-term” technology priorities revolve around: • Leveraging shared services (e.g. cloud computing, data center consolidation, geospatial
technologies);
• Automating processes to improve delivery of citizen services;
• Advancing information security: move to real-time security, improved ID management, cyber incident sharing; and
• Investing in technology infrastructure to reduce costs and energy consumption
Security requirements will become much more robust (e.g., legislation, Cyberscope, FedRamp, etc.)• Congress still appears hesitant to put “teeth” into security compliance (e.g. cyber
coordinator budget control, security plan approval, etc.)
INPUT’s Take
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Track agencies’ tech refresh cycles; likely target for investments to support cloud computing, virtualization, green electronics, etc.
Pay close attention to Congressional activity: • Be aware of the technology and policy implications of the numerous bills coming out of
Congress
• Election year will likely mean not much major budget cutting will occur until after elections
Keep an eye on agencies with significant changes to or expansion of mission for opportunities:• VA – Projected expans
• IRS and HHS – health care reform (kicking in at the tail end of the forecast period)
Anticipate future compliance requirements as a requirement to do business with government, such as: security of operations, carbon footprint, financial records related to government-funded projects
Recommendations
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Q&A