FY12 Federal IT Budget on Track with immixGroup Predictions; FY13 and FY14 Planning Subject to Election Year Issues

Three Percent Decrease in FY13 IT Spend Primarily to Affect DoD IT Plans, According to immixGroup Market Analysts

McLean, VA, May 3, 2012immixGroup’s predictions last fall of federal IT spending in FY 2012 remain largely on target with actual spending. The FY12 IT budget remains close to $80 billion; both civilian and defense agencies continue to focus on telework/mobile computing, cloud computing/virtualization, and cyber security as long term strategies. These predictions are particularly relevant now, as product manufacturers prepare for the rapidly approaching conclusion of the current federal fiscal year.

Federal financial statistics and technology trends for FY12 were first unveiled at a Federal IT FY2012 Budget Briefing hosted by immixGroup on October 20, 2011. immixGroup’s Market Intelligence organization, which prepared the findings, provides actionable information that helps commercial technology manufacturers, resellers, and solution providers identify relevant opportunities to do business with the federal government.

Among the original predictions from immixGroup’s budget briefing:

  • Teleworking and mobile computing are among the most important new initiatives being considered by the federal government. Mobile internet and email use will surpass desktop internet and email use by 2014.
  • Cloud computing and virtualization also are emerging trends in federal IT spending, with $20 billion of the originally proposed $80 billion budget potentially targeted to cloud computing migration.
  • Cyber security will continue to top federal IT technology trends government-wide, agencies are beginning to integrate security systems into mobile and cloud-based infrastructures.
  • Data center consolidation efforts also will be key across federal agencies. The Federal Data Center Consolidation Initiative (FDCCI) reduces the cost of data center hardware, software and operations, and improves overall federal IT security and increases the use of more efficient computing platforms and technologies.

According to Tim Larkins, market intelligence consultant at immixGroup, strategy and budget documents throughout federal civilian and defense agencies indicate that these technology segments remain high priorities. “In FY12, we’re seeing a lot of planning and talking about cloud and mobile, but not a lot of action just yet.” For the time being, agencies will focus on managing their data and building the supporting infrastructure to sustain cloud and mobile technologies, Larkins said. From a long-range perspective, heavy purchasing and investment in mobile computing and cloud computing is anticipated in FY14 and FY15.

FY13 is sure to bring some uncertainty as contractors are faced with a three percent decrease in IT spend across the board as well as increased debate over planning for the outlying years. The impending election season is likely to spark continued disputes over budget cuts into the next calendar year as well.

Steve Charles, co-founder of immixGroup, points out that “now is the perfect time to be talking with federal employees about their budget process.”

“In any budget cycle, the federal government almost always has three years in play,” Charles said. “At this point, we are seeing the beginning of the end of the current fiscal year, while Congress is debating the president's proposed budget request for FY13. Behind the scenes, budget planners at agencies are drafting IT investment plans for FY14. Most agencies’ plans are due by the end of May in preparation for a proposed budget request to OMB after Labor Day.”

In this election year, ramifications for the federal budget will be felt in both current policy and future direction, Charles said.

“In the early summer, we are expecting a new IT strategy from OMB that will include everything from digital data to mobile devices,” Charles explained. “Moreover, there are indications that the government might run out of money before the presidential elections, requiring a raise in the debt ceiling. The new fiscal year begins October 1, and in light of election-year politics and this potential debt ceiling debate, there is some concern as to whether appropriations will be concluded or whether a continuing resolution will need to be set again through November.”

Another looming issue, Charles said was last year's Budget Control Act, which was part of the debt ceiling debate. This act requires extensive cuts to both civilian and defense agencies January 1, 2013.

“These cuts are not factored into current spending plans and may have real ramifications for spending levels in the next several fiscal years,” Charles said.

For more information from immixGroup’s October 2011 Federal IT Budget Briefing, or to view an on-demand Webcast, visit www.immixgroup.com/civbriefing for the Civilian briefing and www.immixgroup.com/dodbriefing for the DoD briefing.

Contact:
Allan Rubin
Vice President, Marketing
immixGroup, Inc.
703.752.0658
allan_rubin@immixgroup.com

About immixGroup, Inc.

immixGroup helps technology companies do business with the government. The company’s four divisions deliver a unique combination of services for software and hardware manufacturers, their channel partners, and government agencies at the federal, state, and local levels. Since 1997, immixGroup has helped hundreds of large and emerging companies grow and manage their public sector business while providing its government customers with reliable access to leading commercial technologies through the contract vehicles and partners they prefer. For more information, contact immixGroup, Inc. at 703.752.0610, via email at info@immixgroup.com, or on the web at www.immixgroup.com.

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