Steve Charles


6 trends that lead the way to 2013 sales

Here's how to spot the opportunities driving the market forward

The Empire State Building was conceived, built, and occupied during the depths of the Great Depression. The moral is, you can always find opportunity no matter what is going on around you.

That’s especially true in the federal IT market, where the real picture is distorted by the cloud of political wrangling surrounding the government’s fiscal situation. For IT sales, technology manufacturers should stay in synch with the two main drivers of technology purchases products that support mission delivery, and those that support the next generation of infrastructure from the data center out to users’ devices.

The election results mean that the IT governance trends we’ve come to understand over the last few years will continue. These policies seek to cut existing infrastructure costs to fund new and improved mission systems.

As the year dominated by an election campaign winds down, here are my six picks for the most important trends to keep in mind when planning your sales strategy:

1. Cloud first: The cloud push has been on for nearly four years. Most cloud activity has centered on commodity IT—email, websites, and small-scale application development environments. Email to the cloud includes suites of office productivity applications that, in many cases, have been optimized for mobility. However, most support systems and mission systems are largely not in a cloud model. One exception is the intelligence community. It uses internal clouds, which create a conventional market for the myriad of products required to equip data centers. Along with support systems and mission apps, the next wave of cloud technology involves the cloud broker model, an inter-agency cloud buying model likely to become the responsibility of the General Services Administration.

2. Shared services: In between personal collaboration and productivity products, and mission or enterprise applications, lies support systems out of which the government is trying to squeeze cost. These are prime targets for sharing among agencies. Under the “shared first” policy, OMB is urging agencies to consolidate support functions such as financial, HR, payroll, and grants and contracts management systems. Consolidation in the form of exposing network-based services for use by others gives contractors instant reference accounts for potential additional sales. But, fiscal law hoops and hurdles remain.

3. Data center consolidation: Along with fewer data centers comes the need to re-engineer those that remain to deliver more computing power year-over-year with flat budgets. Virtualization beyond the server; new cooling, power and backup power arrangements; modernized storage subsystems all hooked together with next generation fabric/mesh network topologies will be in demand.

4. Competition: Expect a highly competitive market, in part because the dollars are flat, but also because of the competing imperatives of small business goals, greater use of competitive bidding under contract vehicles, fewer sole source justifications being signed, and OMB’s push for more strategic sourcing. That last point, strategic sourcing, is one to watch.

5. Federal Information Technology Acquisition Reform Act. The acronym, FITARA, sounds like an Italian fitness bike but this is more like a highway paving machine, formalizing into law many of the reforms of the administration’s 25-Point IT Acquisition Reform Plan. It also includes new authority over IT expenditures at the Departmental CIO level, a commodity IT classification system with a commodity IT acquisition center, plus designated assisted acquisition centers of excellence. Vetted but not yet formally introduced, FITARA originates in the House Committee on Government Oversight and Reform.

6. Digital Strategy, mobility, security. The IT Acquisition Reform Plan was joined by the Federal Digital Strategy last year as a key piece of policy to get the government to a 21st century IT model. It means developing data stores, applications, and hardware delivery platforms as separate but interchangeable pieces based on standards. The mobility movement is real. Cybersecurity is moving from a compliance model to a continuous monitoring model, coupled with data analytics. Together they are forming a rich market for hardware, tools, and value-added services.

Yes, there’s a lot going on, but it should be comforting to know that we are simply moving forward with initiatives that we’ve talked about for the past few years.  Happy selling in 2013!

About the Author

For the past two decades Mr. Charles, immixGroup co-founder, has helped hundreds of technology manufacturers succeed in the government marketplace. His breadth and depth of expertise on every dimension of the government technology ecosystem provide technology manufacturers with a strategy and clear focus for the greatest success. Mr. Charles is adept at mapping technology product lifecycles and revenue models with appropriate channel and contract vehicle strategies in light of current procurement law, regulations and policy. He receives glowing reviews from the training workshops he facilitates to help sales teams understand the sales tactics needed to address each step in the government acquisition process. Mr. Charles is actively involved in government-industry associations including TechAmerica, ACT-IAC, Coalition for Government Procurement, and the National Contract Management Association. He meets regularly with leaders in government and industry to increase understanding and positive action. Mr. Charles co-authored The Inside Guide to the Federal IT Market, a how-to book for technology companies selling to the government. He is regular contributor to Washington Technology.

Reader Comments

Thu, Dec 27, 2012 subrot0 virginia

Yikes, nothing like going into the deep end first. We are a small business and our main customer will leave us at the end of 2013. We now have to learn to sell to the federal government. Should be interesting process in these very turbulent times.

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