Federal Software Market Poised for Transformation

Report Examines Market Forces and Forecasts Growth to $8 Billion by 2015

Oct 21, 2010, 16:49 ET from INPUT

RESTON, Va., Oct. 21 /PRNewswire/ -- The convergence of technology, policy, politics, and culture is transforming the federal software market. Demand for software products from the U.S. federal government is poised for transformation due to the confluence of technology changes and policy drivers. "Factors like cloud computing and virtualization that have been widely adopted in the private sector are beginning to take hold in the public sector," said John Slye, principal analyst, Industry Analysis at INPUT. "We are going to see significant change in the coming years and the outcome will transform how and from whom agencies buy and maintain software -- including the types of software they select and why," he said.

Key market forces currently shaping the demand for software in the federal government include:

  • Strong political pressure exists to contain, if not reduce, discretionary spending
  • Administration policy priorities are focused around transparency, cost savings, and performance
  • Forces within the market are transforming the culture of IT organizations
  • Technology trends -- such as the evolution of cloud computing and virtualization -- are transforming IT infrastructure

The speed of transformation clearly depends on the ability of federal agencies to fund, implement, secure, and manage the innovative software solutions that could change how the government operates. "Software is critical for addressing many of the government's priorities, and agencies need vendors to not only creatively package and price their software, but also to provide evidence that solutions will drive down costs and simplify their IT environments," said Richard Schum, senior analyst, Industry Analysis at INPUT. Schum emphasized the Obama administration's push to leverage IT to increase efficiency as a crucial catalyst: "A lack of buy-in from all aspects of the bureaucracy may slow down these changes, but ultimately, these changes are inevitable."

The transformation to a more agile and simplified software environment requires a change in an agency's mindset. In many ways, the evolution of software capabilities within agencies will require them to look beyond their own domain, roles, and controls, and examine the business functions and processes of other organizations to see how software can be leveraged across the board. Contractors can navigate the cultural roadblocks by making the organizational connections for them.

Contractors can ready themselves for the significant shifts in the federal software market with the new report, Federal Software Products Market 2010–2015, which illustrates that the government's demand for vendor-furnished software products will increase from $6.5 billion in 2010 to $8.4 billion in 2015 at a compound annual growth rate of 5.2 percent. The report examines the software landscape within federal organizations, how various trends will likely impact federal software spending, and the related implications for the government contracting industry. It also includes actionable advice on how vendors can respond to the different trends affecting the market.

Report Authors: Slye and Schum are available for inquiries.  

Report Availability: Federal Software Products Market 2010–2015 is available on INPUT's website at the following link: http://fedsoftware2010.input.com.


INPUT, the authority on government business, was acquired by Deltek in October 2010. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. More than 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 government procurement services and market information, consulting, powerful sales management tools, and educational and networking events. For more information about INPUT, visit www.INPUT.com or call 703-707-3500.

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About Deltek

Deltek (Nasdaq: PROJ), which recently acquired Maconomy and INPUT, is the leading global provider of enterprise applications software and solutions designed specifically for project-focused businesses. For decades, we have enabled government contractors and professional services firms to automate mission-critical business processes around the engagement, execution and delivery of projects. Over 13,000 customers use our solutions to measure business results, optimize performance, streamline operations and win new business. For more information, visit www.deltek.com.  

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