IT spending in the SLED market has increased 17% since 2015—an exciting growth trend. One expert predicts where the spending will happen this year.
If your business supports customers in the SLED market, you’ve got good reason to be excited about the year ahead. According to Dustin Haisler, chief innovation officer of Government Technology Magazine, IT procurement volume for SLED agencies has increased nearly 17% since 2015—representing astronomical growth for government technology—and the strong growth trend will likely continue into 2018 and beyond.
A look back. A look ahead.
Last year, state and local government spent about $101 billion on IT and IT services. In 2018, Haisler predicts that number will increase to $103 billion. Here’s why.
“More and more agencies view IT as the foundation for everything the government delivers today,” said Haisler. “Whether it’s for transportation or any type of social services, technology is the backbone for it all. We will continue to see significant growth as an increasing number of paper processes are replaced with digital technologies.”
2018 spending forecast for 8 top verticals
Where will the IT spend go? Haisler shares his predictions for what, where and why.
Health and Human Services (HHS)
Projected IT spend: $26.9 billion
While uncertainty around healthcare exists, especially at the federal level, many states continue to invest in some major focus areas, such as child welfare systems, as they seek to modernize these social systems of delivery across HHS at the state level.
Projected IT spend: $14 billion
Spending in K–12 education is largely driven by a focus on bridging connectivity, connecting campuses and personalizing curriculum and learning systems. Cybersecurity is also a major priority, as CIOs seek to protect students’ data and provide end-to-end security all the way down to the printer level.
Projected IT spend: $12.8 billion
Higher education organizations are prioritizing stronger networks, IT connectivity, personalized learning and driving a better student experience. There’s also a big focus on innovations for data storage for growing student records, including some early experiments with emerging technologies like blockchain, in addition to micro-credentialing programs.
Projected IT spend: $11 billion
One of two verticals with the highest year-over-year growth (the other being public safety), transportation spending is being driven by the “smarter cities” movement. Many cities are seeking ways to enhance their transportation systems, driven by the availability of new video technology, new sensor technology and other smart transit-oriented systems to support autonomous vehicles and other innovations.
Projected IT spend: $8.7 billion
This is going to be a strong year for public safety. All 50 states, plus the surrounding government territories, are opting into the First Responder Network Authority (FirstNet), a joint effort by AT&T and the federal government to give emergency responders the first nationwide, high-speed, broadband network dedicated to public safety. A lot of major hardware companies have started building new capabilities to support this growing ecosystem. NextGen911 is another important growth area in public safety, as citizens now demand the ability to text 911 and exchange information. Additional spending will support video footage for public safety and bridge the challenge of administering and storing these expanding bases of video.
Environmental and housing
Projected IT spend: $7.5 billion
Many new innovations support affordable housing in cities and counties across the country, including environmental sensors that help provide greater situational awareness. Expect to see strong spending in these areas in 2018.
Finance and administration
Projected IT spend: $9 billion
To support the government’s many systems of records, you’ll see big growth and focus on ERP replacements, cybersecurity, data analytics, business intelligence and modernization of IT infrastructure, as agencies try to do more with what they have. We’ve seen a significant uptake in agencies starting to explore replacing systems that have been in place for years with new, more mission-critical ones.
Projected IT spend: $8.5 billion
This spend is largely driven by the rise in new “smarter cities” technologies. People are investing in broadband connectivity, infrastructure, data analysis through sensors, automated meter reading solutions and any technology designed to help make a utility infrastructure smarter through situational awareness.