Global consolidation to impact IT investment

Government Insights, a subsidiary company of research analyst IDC has predicted that global IT consolidation will heavily influence worldwide government IT investment in 2007.

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By  Dawinderpal Sahota Published  January 4, 2007

Government Insights, a subsidiary company of research analyst IDC has predicted that global IT consolidation will heavily influence worldwide government IT investment in 2007. Teresa Bozzelli, chief operating officer and managing director at Government Insights, commented: "The government market, with over US$150 billion targeted for technology spending in 2007, is among the top three vertical industries worldwide. With a US$9.1 billion increase in technology investments from 2006 to 2007 and a compound annual growth rate projected at 4.1% through 2010, this is both a high-value and high-growth industry that is typically less volatile that many other IT industry markets." The study states that IT spending will continue to be a priority to the extent that it drives or holds down operational costs and improves service delivery to government partners. Resellers and other private sector organisations will increasingly rely on governments to assure security and continuity through improved communications and coordination across the public sector. New business models including collaborative service delivery and technology disruptions, such as open source software, service oriented architecture, and enterprise resource planning, will also impact government behaviour and consequently resellers trading with public sector institutions. "In response to these key market drivers, government organisations are pursuing strategies and changing behaviours to maximise IT investment values and adapt to the constraints and opportunities they present," added Bozzelli. The research agency reckons 2007 will see governments pursuing standardisation and consolidation. Although the prioritisation of resources being consolidated will differ according to region, the trend will be driven largely by the global movement to reduce operational costs and increase government value through improved service delivery. Government insights believes that public sector organisations will pursue this path because they think that integrating applications, systems, and processes will improve interoperability, operational effectiveness, and utilisation of the technology infrastructure that serves as the foundation for measurable government outcomes. "Governments will pursue standardisation and consolidation to maximise value from these efforts. Vendors must increase their understanding of government interoperability as it evolves, as well as the appropriate technologies, services, and partnering strategies that will help governments achieve this universal government priority," Bozzelli concluded.

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