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July 13, 2009

INPUT Reviews Federal IT Spending Trends Till 2014



INPUT reportedly announced the release of its latest market research titled, “''Federal IT Market Forecast 2009-2014,'' saying there will be significant growth in cloud computing, green technologies, Service Oriented Architecture (SOA), Healthcare IT (HIT), and cyber security over the next five years will directly impact federal government IT spending.
Research analysts at the firm claim their organization specializes in researching government fiscal policies and spend, said that INPUT used the fiscal year 2010 budget request released by the Office of Management and Budget (OMB) as an important source of information for the report.
"The Obama Administration's efforts to improve the economy include making significant investments in the federal government's IT infrastructure," said Tim Dowd, chief executive officer for INPUT. "This creates demand for companies that can facilitate the growth of this infrastructure. For example, IT vendors that can help the federal government take advantage of cloud computing, cyber security or assist government agencies in developing the environment will be well positioned."
INPUT predicted that federal government demand for IT products and services will grow at a compounded annual rate of 3.5 percent over the next five years, reaching $ 90 billion in total market value by 2014, up from $ 76 billion in 2009. The main reason for assured growth is the government’s overall IT initiative, said officials.
Cloud computing is expected to generate more than $ 1 billion over the next half a decade with an anticipated growth rate of 30 percent per year, said officials, because of projected cost savings, enhanced working speed, built-in redundancy and the near elimination of costly computational systems per individual.
The research organization claims the growth is also being fuelled by SOA solutions that have been embraced by most defense and government agencies, and says the impetus will be sustained because the path for speedy, unambiguous work flow and technology deployment has been clearly cast in stone by the standards and definitions sculpted by the National Institute of Standards and Technology (NIST).
"In light of the recent cyber attacks on the New York Stock Exchange, White House, and other government agencies, INPUT has seen heightened interest and activity in this area from our constituents - both contractors and government officials,” said Dowd. “We expect cyber security issues will continue to increase in profile and priority in the federal IT market for the next several years."
INPUT says that only 1 in 10 dollars is allocated towards security even though federal government will increase information security spending from $ 8.2 billion in 2009 to $ 12.2 billion by 2014 at a compound annual growth rate (CAGR) of 8.3 percent.
The good news is that the government is show signs of taking National cyber security very seriously. Melissa Hathway had led former President Bush’s $ 6 billion per annum Comprehensive National Cyber security Initiative, and she also led a 60 day review, which was ordered by President Barack Obama and started in the second week of February this year, of the nation’s cyber security to examine how well the U.S. federal agencies use technology to protect data, thwart spies and malicious hackers.
During the review period Hathway’s duties included an inventory of what was already being done and recommendations on how processes, policies and procedures can be improved.
An earlier report, “Cyber Chief Centered Concern, Clarion Call” claimed that High ranking IT and influential government persona are clamouring that the cyber security constitutes enough of a clear, present and ongoing danger to merit the head be located at the white house with non-negotiable authority, a substantial budget and comprehensive accountability.
"There is a focus on reducing the nation's carbon footprint and the cost of energy through investments in renewable energy sources and smart grid technology," said Dowd "The federal government will take the lead as a role model through the use of green technologies, practices and policies."
INPUT said that the Energy Independence and Security Act (EISA) of 2007 and environmental decrees in the American Recovery and Reinvestment Act of 2009 (ARRA) are driving government to use only green IT products and services, and that intelligent energy management systems will include "smart grid" modernization of the utility industry, a requirement that will keep vendors gainfully occupied well into the future.
Some of the Green IT innovations include software and hardware combined packages that inform the power source controller within equipment to selectively shut off power supply to and from unused ports and devices. One set of resources that helps IT departments of any type of organization keep a tight scrutiny on power consumption for each port and each device are Advanced Monitored enclosure based Power Distribution Units.
Many companies are exploring the possibility to switch to Direct Current (DC) rather than the high cost and carbon generating Alternating Current (AC). At least one known company houses DC power plants and offers the option of DC power that is considered an attractive option for companies who need high-equipment densities to house rich digital content.
More examples of Green IT are managed services, virtualization software, cloud computing and software-as-a-service (SaaS (News - Alert)), which for example, may be a viable option to reduce the carbon foot print since SaaS adds another dimension that significantly cuts down on IT and infrastructural costs. It gives customers the freedom to use and pay for only select components of their choice from software suites, and the flexibility to add other requisites as and when the need arises.
Prior to this innovative customer driven request for ‘a use and pay when required only’ approach, entire solutions had to be bought and installed at a significantly higher one-time cost. IT support resources such as staff, network equipment, installation fees and annual maintenance contracts are kept to a minimum, if not eliminated. With lesser pre-installed information to wade through, systems become more agile and corrective measures require lesser bandwidth, are more focussed and can be done remotely.
"Technology companies wishing to do business with the federal government over the next five years need to begin positioning themselves now for the opportunities that will grow out of the increased investment in IT," said Dowd.
Another boom sector predicted is Health IT (HIT).
“We’ve got the most inefficient healthcare system imaginable. We’re still using paper, we’re still filing things in triplicate. Nurses can’t read prescriptions doctors have written out. Why wouldn’t we want to put that on an electronic medical record that will reduce error rates, reduce cost of healthcare and create jobs right now?, ” said Barack Obama, President of the United States of America.
The proposed budget titled “A New Era of Responsibility: Renewing America’s Promise” has earmarked $630 billion over 10 years for the reform of the healthcare system, out of which $76.8 billion is dedicated towards Department of Health and Human Services’ (HHS) full Information Technology (IT) adoption.
This allocation comes close on the heels of the $19.2 billion, out of the $147.7 billion, set aside for health IT, by law in the ARRA, to create complete Electronic Health Records (EHR), and has made it compulsory for medicos and related health institutions to migrate all existing paper medical records to EHR by 2015, or face severe cash penalties.
A positive offshoot is that HIT will allegedly generate at least 200,000 new jobs in USA. HIT also targets early detection of epidemics, chronic disease tracking and creating cloud resident personal health records for individuals to instantly view and share with doctors anywhere on the globe to enable them to avail timely and safe medical intervention.

Vivek Naik is a contributing editor for TMCnet. To read more of Vivek's articles, please visit his columnist page.

Edited by Tim Gray


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