Companies providing technology as a service stand to win out, one analyst says.
The White House revealed its $1.1 trillion skinny budget Thursday, slashing funding for many federal technology research and grant programs, including the Energy Department's R&D unit, the Advanced Research Projects Agency-Energy.
It's less clear how the administration plans to address the federal government's internal information technology challenges. In the last Congress, lawmakers proposed legislation that would create working capital funds at agencies for IT modernization programs, but the White House's budget blueprint is light on details about IT spending.
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It mentions information technology just a handful of times: pledging to build up the Veterans Affairs Department’s IT system to “improve the efficiency and efficacy" of its services; committing to “strategically enhance” the Treasury Department’s security systems and “preempt fragmentation” of its IT management to prevent cyberattack; and allotting an additional $100 million to the Census Bureau, some of which would be used to fortify its internal IT to support the 2020 Census.
But despite scarce details or dollar amounts in the blueprint, contractors might see an opportunity to start selling their technology as a service directly to government, Govini analyst Matt Hummer told Nextgov.
President Donald Trump’s administration has prioritized reducing the federal workforce and government spending by cracking down on duplicative programs, Hummer explained, which is a "natural progression to outsource [technology services]” instead of buying the components separately and relying on an agency’s internal workforce, or a systems integrator, to set up the system.
"What we're talking about is a massive transition in the way things are bought and provided,” he said; systems integrators could soon lose out to companies who provide their technology as a service.
The White House’s fiscal 2017 budget requests $11 million for a real-time data analytics program to help crunch information that would be used for immigration enforcement; though also light on specifics, the inclusion of that program in the request suggests that the administration may be interested in the analytics-as-a-service model, Hummer said. Broadly, the budget demonstrates “emphasis on collecting information and using that information to organize resources.”
Tech contractors may not be so optimistic. “We are particularly concerned about arbitrary and disproportionate reductions in some agencies,” Professional Services Council President and Chief Executive Officer Dave Berteau said in a statement. But contractors can “help bridge that gap” when “cuts ... do not align with the vital missions and functions of those agencies.”
Steep budget cuts “may make IT acquisition a challenge,” Elizabeth Hyman, executive vice president for public advocacy at CompTIA, told Nextgov in a statement. “But some might choose to see this as a moment of opportunity—where smart acquisitions to modernize IT systems can make agency missions more efficient.”