Federal IT: Casualty of War

5:48 PM -- Here's another take on the IT spending slowdown: U.S. war efforts are partly to blame for reduced outlay by Uncle Sam.

In its latest forecast on government IT spending, analyst firm INPUT, which specializes in government business research, says: "Current slow growth levels are largely due to dollars being shifted to war efforts and when these demands subside INPUT expects a return to more traditional growth rates in the next few years."

The fiscal year 2007 will be one of two low points for IT spending growth in the last 18 years, INPUT says -- the other being 1994. The fiscal 2007 IT budget as enacted is 2 percent below the $66.2 billion used in 2006. (The fiscal 2008 budget calls for $66.4 billion.) While a range of factors are involved, wartime spending in Iraq and Afghanistan (as well as the Global War on Terror) have cut into the IT budgets of the Department of Defense and other agencies.

But even though war costs have slowed federal IT purchasing, they haven't stifled it. INPUT's forecast calls for IT spending by the government to grow about 5.1 percent annually, from $77.4 billion this year to $99 billion in 2012.

Most of the money will go to IT gear and services for defense, intelligence, homeland security, and health related programs, INPUT says.In some areas, spending will outstrip the overall growth rate. Agencies working on intelligence, for example, are expected to spend $11.1 billion in 2007, and that figure's expected to grow more than 8 percent to $16.6 billion by 2012. And IT for health-related programs will cost agencies $5.3 billion in 2007, growing more than 10 percent annually to $8.7 billion in 2012.

Where does storage fit in? Take your pick: All of the areas earmarked by INPUT, including software, computer equipment, and services, are apt to include storage wares. Topping the list of IT elements most in demand are services, with outsourcing of IT estimated to grow from $13.8 billion in 2007 to $19 billion in 2012.

The data hints that while war is diverting IT funds, it's generating demand for secure data stores that serve the nation's interest in staying safe.

Then again, staying safe could be a priority without the war, couldn't it?

Mary Jander, Site Editor, Byte and Switch0