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IT Opportunities in State and Local Government

Product Type: Market Research Report
Published by: Datamonitor
Published: July 2005
Product Code: R313-11823
Description
Introduction
Driven by pressure to improve constituent services, reduce costs and develop efficiency, US state and local governments are increasing their technology spending. Changes in internal structure and constituent service delivery including increasing federal funds, consolidation of IT management, and deepening of e-government will lead to even greater opportunities for IT vendors in this market.

Scope
Forecast of total IT spending and vendor opportunities for FY2004 to FY2009 by government function and technology segment
Sizing of market in both state and local government
Identification of trends emerging in state and local government IT market
Profiles of select systems integrators serving this market
Highlights
Total state and local government IT spending will grow from $55.0B to $62.4B from FY2004-09.

Spending will shift away from hardware and networking towards software and services. Reasons include falling hardware prices, loss of workforce to retirement and growing interest in e-government and enterprise-wide systems.

Datamonitor has identified public safety, health & human services, general government and transportation as the top functional areas for IT investment by state and local governments.

Reasons to Purchase
Evaluate opportunities in the state and local government technology market by government function and technology segments
Compare opportunities in both state and local government
Identify competitors and potential areas for partnerships in the state and local government IT market
Table of Contents
TABLE OF CONTENTS

CHAPTER 1 EXECUTIVE SUMMARY 3

Introduction 3

Market context 3

Customer focus 4

Action points 5

CHAPTER 2 INTRODUCTION 12

What is this report about? 12

Who is the target reader? 13

How to use this report 13

CHAPTER 3 MARKET CONTEXT 14

Introduction 14

Key findings 14

State and local government technology budget analysis 17

Spending by technology segment: state and local government will shift spending towards services and software 18

Spending by function: state and local governments place top priority on public safety 20

Spending by level of government: state vs local 23

Technology spending by state governments 23

Spending by state: population is not the only determinant of government IT spending 26

Spending by technology segment: state government technology mix will shift towards software and services 27

Spending by function: state governments focus on health and human services 29

Technology spending by local governments 32

Spending by technology segment: local government spending on services and software is growing 34

Spending by function: public safety is primary recipient in local government 37

Trends in state and local government IT spending 39

Renewed interest in consolidation 40

Increasing influence over technology decision-making 42

Taking e-government to the next level 43

Changing role of federal funds 45

CHAPTER 4 COMPETITIVE DYNAMICS 48

Introduction 48

Key findings 48

Overview of vendors 49

Profiles of select systems integrators in the US state and local government market 50

State- and local-focused IT vendors rank highly in market: ACS, CGI-AMS, Maximus 50

Broad IT services firms have mixed results: EDS, IBM, Unisys 53

Federal contractors are expanding state and local offerings: Lockheed Martin, Northrop Grumman 55

Consulting firms racing into state and local government market: Accenture, BearingPoint 57

CHAPTER 5 ACTION POINTS 60

Introduction 60

Follow the federal money 60

Investigate new sources of funding 60

Seek out regional projects, but be prepared for more upfront evaluation 61

Focus on small-scale outsourcing at the local level 61

Be willing to enter partnerships either as the prime or the sub 62

CHAPTER 6 APPENDIX 63

Research methodology 63

References 63

Related readings 64

SPP writing team 64

How to contact experts in your industry 66





LIST OF TABLES

Table 1: US state and local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) 19

Table 2: US state and local government IT spending by function, FY2004-FY2009 ($M) 22

Table 3: US state government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) 28

Table 4: US state government IT spending by function, FY2004-FY2009 ($M) 30

Table 5: US local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) 35

Table 6: US local government IT spending by function, FY2004-FY2009 ($M) 38





LIST OF FIGURES

Figure 1: US state and local government IT spending: vendor opportunity vs internal spending, FY2004-FY2009 ($B) 18

Figure 2: US state and local government IT vendor opportunity by technology segment, FY2004-FY2009 ($B) 19

Figure 3: US state and local government IT spending by function, FY2004 21

Figure 4: US state government IT spending by technology segment, FY2004 24

Figure 5: US state government IT spending by technology segment, FY2009 24

Figure 6: US state government IT spending: vendor opportunity vs total spending, FY2004-FY2009 ($B) 25

Figure 7: US state government IT vendor opportunity by technology segment, FY2004-FY2009 (% of total) 27

Figure 8: US state government IT spending by function, FY2004 30

Figure 9: US local government IT spending by technology segment, FY2004 32

Figure 10: US local government IT spending by technology segment, FY2009 33

Figure 11: US local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) 34

Figure 12: US local government IT spending by function, FY2004 37

Figure 13: State agencies are mainly influenced by the state itself, while local agencies feel influence from multiple sources 43

Figure 14: State and local agencies expect to receive federal funds for public safety projects 45





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