State and local government organizations recently turned a corner, both fiscally -- their new fiscal year began July 1 -- and perceptually, as a result of tax hikes, operational cuts and fee increases over the past two years.
With the rapid growth in IT spending over the past four years, the competitive landscape in the federal government market has intensified. As I have done for previous Top 100 issues, here are some of my observations about the federal IT market.
As demand for specific technologies and services goes through its inevitable cycle, vendors with the appropriate skill sets will rise, while other vendors will fall. Vendors that once dominated key areas will face internal problems that let a crop of new vendors gain market share. With this in mind, I have outlined three of the emerging competitive issues reshaping the state and local market today.
Over the past 10 years, state and local governments have tried to reorient the delivery of public sector services around the citizen. Mantras such as "service to the citizen," "customer-centric government" and "government anytime, anywhere" heralded new objectives for important services.
Buoyed by federal legislation plus technology refresh cycles and innovation, transportation agencies are at the forefront of significant technology change.
Over the past three years, state and local governments have curbed spending on hardware and postponed large-scale hardware refresh initiatives. Although a tight fiscal environment fueled many of these moves, there also has been increasing agreement among public-sector chief information officers that hardware deployment across the jurisdiction needed to be reigned in.
State and local governments are wary of using unproven, untested technologies, and it's been a significant obstacle to early adoption of emerging technologies to support public-sector processes.
Traditionally, state and local governments are risk-adverse organizations. Public-sector entities often shun bleeding-edge technology in favor of proven, safe solutions.
The state and local government market is large and complex. Companies can best get a handle on this market by targeting these five major segments: administration and finance, tax and revenue, transportation, health and human services, and public safety and criminal justice.
Despite a brightening fiscal environment, state and local government organizations still struggle with funding for certain information technology projects. Over the past three years, budget shortfalls have forced these governments to find and expand innovative alternatives to the traditional appropriations and funding processes.
Dear Gov.-Elect Arnold Schwarzenegger: Congratulations on your victory. With the California gubernatorial recall election over, the hard part of governing now begins.
Homeland security continues to be an important yet underdeveloped market opportunity. Since Sept. 11, 2001, first-responder organizations have been at the center of how the market would develop and mature.
China's government recently re-announced a policy that forces all public-sector entities to use only locally produced software for all system upgrades. The policy, which will be in place until 2010, is expected to increase domestic-made software use from 33 percent to 100 percent.
Last year, Gartner Dataquest identified the problems and challenges that, taken together, are creating the "perfect storm" among state and local governments. These problems -- such as growing budget deficits, a graying work force, the decline of chief information officer leadership and a host of new expenditures such as homeland security -- are threatening to overwhelm state and local officials.
Over the past 18 months, there has been growing sentiment among public-sector organizations to curb the use of information technology development by non-U.S. citizens or work performed overseas.
