Technology firms should love 2018 government IT spending projections

tech firms and public spending in 2018

2017 was a banner year for technology sales in government. One of the largest contracts of the year came from the Massachusetts Bay Transportation Authority. That agency awarded a $723 million contract to overhaul its ticketing program to allow passengers to pay with their smartphones.

In addition to software systems, cloud servers were also a popular purchase by local governments in 2017.  Broadband infrastructure was also a high budget item for public entities. And, as more government entities rely almost completely on technology, the issue of cybersecurity becomes increasingly important.

In addition to the trend to spend on technology, public agencies suffered one of one of the worst cybersecurity breach years. After refusing to pay $23,000 in a ransomware attack, North Carolina’s Mecklenburg County was forced to rebuild its cyber infrastructure. A data breach at the University of North Carolina Health Care System exposed names, social security numbers and medical information of thousands of patients. Not even voter registration systems were safe. Georgia reported 7.5 million voter records were involved in a data breach. And the interesting takeaway is this…government spending on technology has just started. Projections are that 2018 will be an even bigger year for government technology procurement. 

In the first six months of 2018, 21 percent of city CIOs plan to add new technology positions. That’s up five points from last year. The top priority for city CIOs in 2018 will be security management. That’s likely because one-third of local government IT directors have reported a spike in cyber-attacks over the last 12 months.

The trend appears to be extremely strong. Roughly half of all states have established a cybersecurity commission, including Louisiana, which signed legislation this month establishing a cybersecurity commission for defense and job growth.  Colorado’s State’s Information Security Advisory Committee’s IT budget will increase $6,000 to $9.6 million.

This has created an abundance of opportunities for IT firms.  Here’s a quick sampling of what can be expected.

After a ransomware attack in a nearby county, Putnam County, Ohio, will take no chances. The county will upgrade its cybersecurity system by replacing its eight-year-old servers with three new ones. The new servers will have increased security, allowing the county to quickly respond to any attack. The county has not released a cost for the project yet but hopes to begin the upgrades in mid-2018.

Last week, the Long Beach, California, city council voted to move forward with plans to extend the city’s fiber network. The city faces outdated hardware and software and feels its network is vulnerable. This project will be expensive as it is projected to cost approximately $67 million. Procurement documents are anticipated by mid-2018.

Oklahoma City’s public schools will receive $52 million in technology upgrades in 2018. The district intends to build a 100-gigabyte core network and upgrade the district’s cybersecurity system. Funding for the project was allocated from a 2016 bond package that was approved. The new network will serve 40,000 students.

The city of San Francisco plans to upgrade its digital infrastructure by pursuing a citywide municipal Internet. This project is also projected to be quite costly as projections are that the project will require $1.5 billion. When complete, this would put San Francisco in a unique category as no other city has such a comprehensive technology infrastructure. The project is likely to be a public-private partnership initiative. A timeline for the project has not yet been released.

As 2017 is ushered out as a great year for IT procurement in the government marketplace, it appears that 2018 will be even rosier. That should make lots of technology firms very happy.

Mary Scott Nabers

Mary Scott Nabers is president and CEO of Strategic Partnerships Inc., a unique public affairs firm that specializes in procurement consulting, market research, government affairs and public-private partnerships (P3s). Mary is also co-founder of the Gemini Global Group (G3), a firm that works with national and international clients on business development, P3s and other types of government objectives.

A recognized expert regarding P3s, Mary is the author of Collaboration Nation - How Public-Private Ventures Are Revolutionizing the Business of Government. Her book explores this growing trend and describes a number of best practices for successful projects as well as the importance for both parties to respect the cultural differences of the other.