IT/telecom is a hotspot of purchasing activity, according to Onvia's most recent quarterly snapshot of the state, local and education (SLED) government market.
Of the four major industry groups examined in the Q2 2016 edition of the report -- Business Services, Architecture Engineering Construction, Operations Maintenance Transportation, and IT/Telecom -- the latter saw the highest rate of growth in volume of contracts. And this growth happened across the board with the industry sub-categories of wireless/telecom growing by 2.8%, software by 8.3% and IT consulting by a whopping 12.2%.
This signals a business-to-government (B2G) marketplace full of potential for a wide range of service providers to win government business. Onvia has found three areas in particular that provide opportunities for success: cloud, virtualization and cybersecurity.
Cloud and virtualization opportunities
State government departments and agencies continue to be a good market for both cloud service and cloud computing providers. State agencies typically have a larger IT budget and a more sophisticated IT staff than smaller local government agencies. In the last year, 24% of cloud-related opportunities in Onvia's comprehensive database of government contracts were issued at the state level -- second only to the 35% of opportunities from the federal level.
Typical government contracts include RFPs for cloud storage, cloud servers or cloud-based operating systems. Operators can find some of these government opportunities in advance -- simply by knowing where to look.
One area of government cloud storage purchasing making waves recently comes from city and county agencies that have been purchasing body cameras or in-car dashboard cameras for their police departments. Those agencies then find themselves with thousands of hours of video being generated and no place to store it all, resulting in increased government contract opportunities for cloud-storage vendors. When an agency starts to issues contracts for body cameras or police car dash-cams, cloud vendors should see signals of opportunity, as contracts for cloud storage from that same agency might not be far behind.
CDW, DLT Solutions, Day1 Solutions and Unisys were some of the most frequently awarded vendors for cloud-related contracts in the past year. But service providers and small-to-midsized vendors can often find just as much success as the bigger companies in the cloud market.
This strategy has also proven successful when pursuing server and desktop virtualization contracts. Over the past year, 22% of virtualization opportunities were at the city and town level, and 16% at the county level.
Cybersecurity: Major growth area
While cloud and virtualization contracts have been solid growth areas for the last several years, one field within government IT in particular has recently risen in importance -- cybersecurity.
Cybersecurity has become a top priority for all government agencies as they experience ever-higher levels of cyber crime. Unisys released a study last year that found 19 of the 24 major federal agencies reported cybersecurity as a significant deficiency or weakness. And a recent Ponemon Institute survey determined the amount of "material data breaches" is nearly the same at state and local levels as it is at the federal level.
This prioritization has led to an increase in cybersecurity procurement opportunities, as Onvia's data shows. More than 4,000 bids and RFPs for cybersecurity services have gone out from agencies at all levels in the last year.
Plenty of opportunities can be found at the state and local levels as well. For example, many school districts are putting out cybersecurity bids to ensure their confidential student and teacher IDs and health records remain protected. Many of these projects come through the federal E-Rate program, and with nearly $4 billion in E-rate funding each year, there is no shortage of government money being spent in this area.
Government opportunities abound
These three areas of growth exist across government agencies of all types. Education agencies saw a 7.3% rate of growth in IT/telecom projects in the last quarter, and so did state and local government agencies, with growth rates over the same time period of 5.1% and 2.1%, respectively.
There are government opportunities within the technology field out there for all vendors, whether it's a large service provider looking to win a big state or federal contracts, or Tier 3 operator just entering the government contracting market via local agencies. By knowing industry trends and targeting the right types of agencies for their businesses, service providers can continue to find success and grow their government sales revenue.
— Nick Schiffler is the Social Media and Content Marketing Specialist at Onvia, a provider of business intelligence, analytics and tools that help companies succeed in the government market. Follow Onvia on Twitter at @Onvia or LinkedIn at Onvia. Special to The New IP