What's hot in 2003?
<FONT SIZE=2>These are the markets that spurred companies to make acquisitions, restructure operations and invest new resources. Here's where IT executives expect to make money.</FONT>
These are the markets that spurred companies to make acquisitions, restructure operations and invest new resources. Here's where IT executives expect to make money.
HOMELAND SECURITY
This hasn't turned into the booming market that everyone first predicted and, except for a few large projects at the new Transportation Security Administration, there haven't been many high-dollar programs.
But the promise remains. The Homeland Security Department alone will spend $2.1 billion on IT in fiscal 2003, and that doesn't count new initiatives. Other agencies are spending money to shore up their own security plans. Plus there is the $3.1 billion earmarked for the states in fiscal 2003, a good chunk of which involves IT and communications upgrades.
More spending is sure to come. The growth isn't sky rocketing, but in this day and age, steady, predictable growth qualifies as a hot market.
And there are numerous opportunities that are byproducts of the homeland security push. During the Persian Gulf War, for example, many reservists were called to active duty, which put a strain on families. As part of the war on terrorism, reservists again are being called up in large numbers. So that there isn't a repeat of some of the problems from a decade ago, the Army Reserves and the National Guard have contracted with Resource Consultants Inc. to provide family support services, including counseling, predeployment services and other services during and after deployment.
The contracts are worth several million dollars a year. "It is an interesting and unexpected sidelight to homeland security," RCI's William Warren said.
OUTSOURCING
Several factors are coming together in 2003 that will make outsourcing a stronger market opportunity.
First is the Bush administration's Management Agenda, which includes two initiatives -- human capital management and competitive sourcing -- that should promote more outsourcing. Second, with the increasing rates of retirement of its workers, the government will need more help from the private sector. According to the management agenda report, about 71 percent of the government's employees are eligible to retire, and 40 percent of those are expected to retire.
The proposed A-76 rules also will make competitions between the government and private sector easier and faster.
There also is a trend, which is being reinforced by the management agenda, of the government looking to outsource more business processes rather than just administrative and support functions.
"There is a transformation of government under way," said CSC's Paul Cofoni.
SMALL BUSINESS
The Bush administration is taking steps to curb the growing practice of bundling smaller contracts into larger ones. The White House released a policy in October calling for the unbundling of large federal contracts where possible and, when bundling is justified, for agencies to strengthen subcontracting goals.
The Small Business Administration and General Services Administration also are working to close a loophole that allows large businesses to retain the small business designation, even if they've outgrown the criteria, as they win option clauses on long-term contracts, such as the GSA schedule.
Under the direction set by the administration, large businesses will have to be more of a "true partner" to their small businesses, said James Bogarty, vice president and chief operating officer of American Technology Services Inc., Reston, Va.
"That's a good change, but I don't think we'll see the full affect until 2004," he said.
SPACE
When Northrop Grumman acquired TRW, the Los Angeles-based defense company picked up major new capabilities that created "a third major player in the space marketplace," according to Vance Coffman of Lockheed Martin, which along with the Boeing Co. have been the dominant space players.
Space will be integral in satellite communications, missile defense and remote sensing, Coffman said. The Navy and Air Force are working on next-generation systems for satellite communications and global positioning systems that are likely to be multibillion-dollar projects.
The market potential is attracting the attention of other companies that don't launch satellites.
CACI has been one of the more aggressive acquirers of companies in areas such as network services and information assurance, and now CACI is setting its sights on space-related businesses, J.P. "Jack" London said. *
HOMELAND SECURITY
This hasn't turned into the booming market that everyone first predicted and, except for a few large projects at the new Transportation Security Administration, there haven't been many high-dollar programs.
But the promise remains. The Homeland Security Department alone will spend $2.1 billion on IT in fiscal 2003, and that doesn't count new initiatives. Other agencies are spending money to shore up their own security plans. Plus there is the $3.1 billion earmarked for the states in fiscal 2003, a good chunk of which involves IT and communications upgrades.
More spending is sure to come. The growth isn't sky rocketing, but in this day and age, steady, predictable growth qualifies as a hot market.
And there are numerous opportunities that are byproducts of the homeland security push. During the Persian Gulf War, for example, many reservists were called to active duty, which put a strain on families. As part of the war on terrorism, reservists again are being called up in large numbers. So that there isn't a repeat of some of the problems from a decade ago, the Army Reserves and the National Guard have contracted with Resource Consultants Inc. to provide family support services, including counseling, predeployment services and other services during and after deployment.
The contracts are worth several million dollars a year. "It is an interesting and unexpected sidelight to homeland security," RCI's William Warren said.
OUTSOURCING
Several factors are coming together in 2003 that will make outsourcing a stronger market opportunity.
First is the Bush administration's Management Agenda, which includes two initiatives -- human capital management and competitive sourcing -- that should promote more outsourcing. Second, with the increasing rates of retirement of its workers, the government will need more help from the private sector. According to the management agenda report, about 71 percent of the government's employees are eligible to retire, and 40 percent of those are expected to retire.
The proposed A-76 rules also will make competitions between the government and private sector easier and faster.
There also is a trend, which is being reinforced by the management agenda, of the government looking to outsource more business processes rather than just administrative and support functions.
"There is a transformation of government under way," said CSC's Paul Cofoni.
SMALL BUSINESS
The Bush administration is taking steps to curb the growing practice of bundling smaller contracts into larger ones. The White House released a policy in October calling for the unbundling of large federal contracts where possible and, when bundling is justified, for agencies to strengthen subcontracting goals.
The Small Business Administration and General Services Administration also are working to close a loophole that allows large businesses to retain the small business designation, even if they've outgrown the criteria, as they win option clauses on long-term contracts, such as the GSA schedule.
Under the direction set by the administration, large businesses will have to be more of a "true partner" to their small businesses, said James Bogarty, vice president and chief operating officer of American Technology Services Inc., Reston, Va.
"That's a good change, but I don't think we'll see the full affect until 2004," he said.
SPACE
When Northrop Grumman acquired TRW, the Los Angeles-based defense company picked up major new capabilities that created "a third major player in the space marketplace," according to Vance Coffman of Lockheed Martin, which along with the Boeing Co. have been the dominant space players.
Space will be integral in satellite communications, missile defense and remote sensing, Coffman said. The Navy and Air Force are working on next-generation systems for satellite communications and global positioning systems that are likely to be multibillion-dollar projects.
The market potential is attracting the attention of other companies that don't launch satellites.
CACI has been one of the more aggressive acquirers of companies in areas such as network services and information assurance, and now CACI is setting its sights on space-related businesses, J.P. "Jack" London said. *