The U.S. federal IT market is one of the largest marketplaces for the IT channel. With an estimated $118 billion of addressable contracts available, it presents an appetizing banquet for members of the channel, but what does it take to succeed? How can value-added resellers (VARs) increase their chances and find a contract? More importantly, what are the current needs of the federal government?
In light of the pending federal buying season, the EDGE360 editors were prompted to look around the IT channel for some of the latest federal IT news for those answers. While the best bet for creating an attractive portfolio of goods and services is to reach out to people with the proper experience like the team at SYNNEX Comstor, ultimately a series of trends are present throughout the latest news.
Breaking Down The $118B “Healthy” Federal IT Marketplace
As stated earlier, the federal IT market is massive, accounting for nearly eight percent of the discretionary budget. Consulting with Deltek’s Deniece Peterson, Tom Temin of Federal News Network, provided a holistic view of the current state of the market and a thorough breakdown of what can only be described as a “healthy federal IT marketplace.”
According to Peterson, the available market includes not just the Office of Management and Budget, which is about 24 agencies. In fact, a bevy of other agencies are in need IT infrastructure investments. From the 24 agencies under the OMB’s purview and the 50-60 from Intelligence to others like the Postal Service and those with embedded IT on ships and aircraft, the entire market is truly massive.
Peterson added that there are largely four segments that the IT channel can target. The first is the U.S. Department of Defense and its constituent agencies and uniformed services. The remaining civilian side is comprised of the Department of Homeland Security, the Department of Veteran Affairs, and the Department of Health and Human Services.
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FITARA 12.0: 60 percent of Fed IT Spending Maintains Legacy Systems
In a recent post from MeriTalk, staff reporter Lamar Johnson shared some news that will likely fundamentally impact the needs of the federal IT market. The Federal Information Technology Acquisition Reform Act, or FITARA, issued by the House Oversight and Reform Committee, along with a testimony from a Government Accountability Office, highlights that nearly 60 percent of the federal IT funding is directed toward the maintenance of legacy systems.
Legacy IT has always been a fertile ground for cybercriminals to gain purchase into a system. But beyond the risks, legacy systems are often less optimized to carry out their essential duties. To address risks and increase efficiency, agencies are working on long-term modernization plans that have either already begun to be implemented or are in the process of starting. Understanding where a specific agency is in its modernization effort will play a crucial role in finding what role an organization can play in it, and how to become a long-lasting part of its success.
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White House Memo Orders Agencies to Identify Critical Software
In a continuation of his May cybersecurity-focused executive order, President Joe Biden has issued another memo ordering agencies to identify critical software in their networks and develop ways to secure it. This list, which agencies have 60 days to compile, will provide an accurate accounting of every IT solution and system that agencies self-identify as being mission-critical.
It should go without saying that once these lists are prepared, they can provide value-added resellers and other IT channel partners with the current needs to help their federal partners fill. In June, the National Institute of Standards and Technology (NIST) outlined the precise definition of “critical software” to include standalone solutions, solutions integral to specific devices, and cloud-based solutions that are purchased or deployed for operation purposes.
Once identified, agencies will have one year to implement updates and integrate new tech into their services, presenting another excellent opportunity for channel partners to find a contract.
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