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Resellers warned about imminent shift in government buying trends

Channel advised to stay alert as global consolidation of IT market threatens to alter the way in which government sector technology buyers make their purchasing decisions.

Global IT consolidation is poised to heavily influence worldwide government IT investment this year, according to Government Insights, a subsidiary company of research house IDC.

New business models - including collaborative service delivery - and technology disruptions such as open source, SOA and ERP will 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," said Teresa Bozzelli, COO and managing director at Government Insights.

The research firm predicts that 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 delivery.

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.

The government sector remains one of the largest investors in technology products and services with spending set to rise this year. "The government market, with over US$150 billion targeted for technology spending in 2007, is among the top three vertical industries worldwide," said Bozzelli.

She added: "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 than many other IT industry markets."