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Study Finds IT Survives Budget Cuts

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A study released last week by INPUT, a Deltek-owned government contract consulting firm, found IT consultants may escape the budget ax threatening to fall on government contractors.

Fueled by the government-mandated move to cloud computing, government IT service contracts are expected to increase over the next four years, from $38.1 billion in 2010 to an estimated $51.7 billion by 2015.

“What we are seeing is a fairly minimal short-term impact in the IT services contracting sphere relative to other areas of contracting,” said John Slye, INPUT principal analyst. “Due to contemporary demands including data center consolidation, enhancements in cybersecurity and national trends toward cloud computing, the IT service industry will be equipped to bear the force of federal cuts better than others.”

With demand for cost saving, more efficient systems and increased communication growing, IT solutions that provide those services stand a better chance of receiving funding. The report predicts the next few years will see an increase in system upgrades. Consulting services aren’t expected to see a huge hit, but may stagnate in growth.

“While IT contracting is not expected to be greatly impacted within the next five years, we will see an increased scrutiny of service providers,” said Angie Petty, INPUT principal analyst. “This may consequently limit options for suppliers who cannot meet the requirements for increased cost control, reporting and transparency.”

The report also predicts growth in the areas of cybersecurity, business intelligence and process automation, data proliferation and mobility and service-oriented architecture.

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