‘Convergence’ of Technologies, Services Impacting Federal Market, Survey Shows

From Bloomberg Government | October 14, 2014

The “convergence” of technologies and services in the federal marketplace is having a significant impact on both government contractors and federal agencies, according to the results of a study by Market Connections, Inc. and the Professional Services Council released Oct. 14.

Nearly three-quarters of survey respondents—75 percent of contractors and 70 percent of government— reported that convergence has had a moderate to high impact. “Both government decisionmakers and contractors agree that convergence is causing a shift in how government buys and industry provides solutions,” according to a summary of the survey results.

However, the survey results also showed a disconnect on how the “as a service” acquisition model is viewed by industry and the government.

Eighty-five percent of contractors agreed it is important for a federal agency to work with a company that can deliver integrated services and technology, compared to 75 percent of government respondents. In addition, 79 percent of industry participants said the lines between technology and services are beginning to blur when looking to buy IT or other mission-related services, compared to 66 percent of government respondents.

The survey results support the view that traditional technology vendors are now providing their products as services. More than half of both industry (68 percent) and government (65 percent) respondents agreed there is a trend toward using this “as a service” acquisition approach.

However, 80 percent of contractor respondents and 58 percent of government respondents hold the view that federal agencies are “behind the technology curve compared to the private sectors.”

‘Evolutionary,’ Not ‘Revolutionary’ Change

The government is designed for “evolutionary change,” not “revolutionary change,” Steven Cooper, chief information officer at the Commerce Department, said during a panel discussion following release of the study by Market Connections and PSC. A lot of the reas0on the government “falls behind is it is not sure where it wants to go.”

One of the “best benefits of ‘anything as a service’ is the ability to move from a capital expense environment to an operating expense environment,” Cooper said.

Other benefits he pointed to are:

  • “speed to value” delivery—rapidly moving value through shard solution or as a service into production; and
  • risk reduction—setting up a network that can quickly “quarantine a breach” and keep everything else operating.

The top benefits of ‘as a service’ include paying only for what is needed, scalability, rapidly deploying new services and improved performance, according to the survey findings highlighted by Market Connections and PSC. Contractor respondents were found to “believe significantly more strongly than government that little or no capital expenditure and improved security are ‘as a service’ benefits.”

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