Input expects $91.4B in IT

Federal spending on information technology will continue to rise between 2005 and 2010, said Payton Smith, manager of public-sector market analysis at research firm Input.

IT spending has held steady at about 7 percent of all discretionary spending for the past several years, according to Smith's data. He predicted that the total IT budget would rise from $70.7 billion in fiscal 2005 to $91.4 billion by fiscal 2010. The budget for contractors would rise from $59 billion to $78.6 billion during the same period, he told the audience at Input's MarketView 2005 conference.

The projected figures equal a compound annual growth rate of 5.5 percent for civilian agencies and 6.1 percent for defense agencies, he said.

Federal efforts to consolidate IT systems will continue to be a major market factor, he predicted. Consolidation is a two-sided coin for contractors, he noted. Agency officials are driven to make smart IT investments to reduce their overall costs. However, the budget pressure that agencies are under makes it harder for them to justify some IT purchases.

Input analysts predicted growth in state and local IT spending from $48 billion in fiscal 2005 to $70 billion in fiscal 2010. James Krouse, manager of state and local market analysis at Input, will present those findings at the conference today.

Krouse predicted some acceleration in growth in fiscal 2006, and a greater increase from 2007 through 2010, caused by the need to outsource technical services that employee retirements will exacerbate.