Forecast: Surging Economy Will Fuel IT Spending By States - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Forecast: Surging Economy Will Fuel IT Spending By States

Market-intelligence firm Input projects states' spending on IT will grow 8% annually through fiscal 2009, to $64 billion.

The resurgent economy means states will find more money to spend on IT, according to a forecast issued Tuesday by Input. IT spending will grow at an annual compound rate of 8% to $64 billion in fiscal 2009, from $46 billion in the current fiscal year, the government IT market-intelligence firm projects.

The recovery will be modest this year and next, in-line with economic expansion, says James Krouse, Input's manager of state and local IT market analysis. IT spending will accelerate as governments replenish rainy-day funds and expand the use of alternative financing schemes, he says.

Input foresees the highest growth rates for professional-services outsourcing, communications and networks, and software; spending in traditional areas such as hardware and maintenance of legacy systems will remain relatively flat or decrease over the next five years.

"The increasing political receptivity of outsourcing has enabled government officials to move processes outside and to focus on core competencies in government administration," Krouse says. "Communications and network spending will also remain strong, given the increased necessity for collaborative homeland security and citizen-centric programs like E-government."

IT spending among most states and localities has been curtailed in recent years as the economic downturn sharply reduced tax revenue. But Krouse says sustained economic activity combined with forced changes in state and local tax structures and an aging government workforce should help push recovery in the state and local IT markets.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
10 Top Cloud Computing Startups
Cynthia Harvey, Freelance Journalist, InformationWeek,  8/3/2020
Adding Fuel to the MSP vs. In-house IT Debate
Andrew Froehlich, President & Lead Network Architect, West Gate Networks,  8/6/2020
How Enterprises Can Adopt Video Game Cloud Strategy
Joao-Pierre S. Ruth, Senior Writer,  7/28/2020
White Papers
Register for InformationWeek Newsletters
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Current Issue
Enterprise Automation: Do More with Less
In this IT Trend Report, we highlight the benefits of automation and the various tools as enterprises navigate turbulent times, try to do more with less, keep their operations running, and stay on track with digital modernizations.
Flash Poll