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July 21, 2009
Despite Fiscal Crisis, Growth Forecast In State and Local Information Technology Spending
INPUT Report Forecasts Critical Trends Shaping State and Local IT Investment
Reston, VA – July 21, 2009 – INPUT, the leading authority on government business, today announced the release of its research report, State and Local IT Market Forecast FY 2009-2014, which analyzes trends that will impact state and local government IT spending. The report notes that demand for vendor-furnished information systems and services by state and local governments will increase from $49.6 billion in 2009 to $60.1 billion in 2014, growing the market by $10.5 billion at an annual growth rate of 3.9 percent.
“The new administration has been active in shaping the direction of this market, primarily through the stimulus package,” said Tim Dowd, CEO of INPUT. “State and local governments' reliance on technology presents opportunities for vendors in the key areas of education, health care, justice and public safety, social services, and transportation.”
INPUT’s report is designed to enhance a vendor’s government business planning with relevant strategic analysis and market forecasts. It provides recommendations which will guide IT vendors to maximize their go-to-market strategy to best take advantage of state and local business opportunities.
Factors Shaping the State and Local IT Market
- Rising unemployment and declining tax and revenue streams
- Changing gubernatorial priorities for the states and their localities
- Changing federal priorities
- Impact of the stimulus
- Fiscal crisis driving state and local agendas
INPUT Conclusions
- States will spend steadily through 2011 with help from the stimulus, but growth will be stifled due to lack of confidence in revenues
- Most state and local agencies will eliminate contractors to save employees
- There will be an increased demand for Software as a Service (SaaS), open source, and Commercial off-the-shelf (COTS) products
INPUT Recommendations for Contractors
- Overfill the contract pipeline to compensate for contracts that will be withdrawn
- Align short-term business development with governors’ priorities backed by stimulus funds
- Keep an eye on long-run, non-stimulus priorities, such as IT projects in K-12 schools – the biggest state and local expense
About INPUT
INPUT is the authority on government business. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 2,000 member organizations, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information about INPUT, visit www.input.com or call 703-707-3500.
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