Despite the spending reductions outlined in President Obama’s proposed 2012 budget, a new Federal IT Services Industry Outlook report shows that some areas will actually see growth.

Angie Petty, principal analyst at Input, told the DorobekINSIDER that the need for greater IT services in the federal space creates a buffer to budget cuts.

The report predicts that the federal IT services market will experience short-term cuts in fiscal year 2011, with an estimated decrease of $1 billion this year. However, in the long-term, the IT market in government will experience a compound annual growth of 6.3 percent over the next five years, Petty said.

“Over the longer term, it’s not so much doom and gloom; there’s actually a sunny outlook,” she said

• Cloud computing
  Last year the Office of Management and Budget outlined an IT management reform plan that called for a cloud first policy.

  “With the move to the cloud, there’s a shift in trying to reduce the number of IT assets in the government and to buy more services rather than spending money on software and hardware,” Petty said.

• Data center consolidation
  The government’s initiative to consolidate more than 1,100 data centers also provides opportunities for IT services contractors, Petty said.

  “Agencies definitely need assistance with the design and consulting and migration and implementation of those consolidation efforts,” she said.

• Cybersecurity
  Petty pointed to a number of cybersecurity bills put forth in Congress. She said she expects that trend to continue. The outcome could be more opportunities for cybersecurity training and preparation for attacks, Petty said.

  “There’s a whole gamut of areas in cybersecurity that have to be fulfilled,” she said.

  And, with the growing use of mobile technologies, wireless administrators will be under “added pressure” to secure those networks, she said.

In these tight budget times, contractors should be prepared to be under greater scrutiny, Petty warned.

“Even though there may be money flowing, [contractors] need to look out for additional reporting requirements, transparency, performance evaluation information,” she said.

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