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Public Sector IT Funding Outlook for 2021--and What It Means for Our Reseller Partners

Public sector IT resellers must anticipate customers’ changing priorities to most effectively position offerings.

4 Min Read
Public sector IT

The market outlook for public sector IT in 2021 is very positive. Not accounting for the additional CARES act and stimulus funding that’s expected later this year, market predictions see an annual growth rate of 11.3% in SLED spending and a modest 0.2% growth rate in federal spending.

Last year was unprecedented, with COVID-19 causing rapid shifts in IT priorities as agencies and academic institutions scrambled to adapt—especially with the quick push to remote work and study. Organizations invested in the technology that facilitated the rapid operational changes they were forced to make, including:

  • Mobile and client-based technology solutions (tablets and laptops)

  • Accessories to enable work from home (web cameras, speakers, displays, keyboard and mice)

  • Cloud

  • Collaboration tools and software (Webex, Teams and Zoom)

  • Cybersecurity solutions

  • Networking and communications

The Pandemic Underscores the Need for Digital Transformation

IT is no longer limited to back-office tools for efficiency—technology is now critical to the government’s mission and its ability to serve its constituencies.

COVID-19 has also accelerated certain technology trends. We’re seeing operational technologies (OT) and information technologies (IT) converging. IoT is everywhere, and every organization is becoming increasingly dependent on technology. With this dependency comes greater risks and the need for improved cybersecurity and more resilient supply chains.

The Challenges for Public Sector Resellers

Social distancing will continue to limit access to government agencies and educational institutions. In-person events that afforded access to influential personnel and visibility to opportunities are still being postponed and may never be the same.

And of course, with a new administration in the White House, there are new federal priorities and funding shifts.

  • President Biden withdrew the prior administration’s proposed spending cuts of $27.4 billion, which touched virtually every cabinet-level agency. The proposed cuts would have also hit the legislative branch of the federal government, the District of Columbia, the Peace Corps and the U.S. Agency for International Development, among other initiatives.

  • President Biden signed a “Buy American” executive order, which is likely to have impacts on the IT solution offerings being acquired by federal agencies.

  • The Biden administration has laid out 21 priorities for 2021. A few notable items include:

    • More use of category management and best-in-class contracting

    • vehicles for scale and efficiency

    • More consumption-based IT pricing and cloud solutions

    • More cybersecurity and cybersecurity maturity model certification requirements, driven in part by the SolarWinds exploit and supply chain risks

    • IT modernization and digital transformation

Limited financial resources at the state and local levels and in academic institutions will also be an ongoing challenge as credit tightens and the demand for consumption-based acquisition models (cloud and XaaS) increases.

Last but not least, resellers will need to train their workforces to sell the ROI of digital transformation linked to mission outcomes rather than IT-modernization lifecycle refreshes based on lowest price and technically acceptable (LPTA) requirements.

Our Advice for Public Sector Resellers Moving Forward

Our reseller partners will have to become experts in social selling and building relationships virtually to position their solutions to win. They’ll need to be adept at using digital media to “surround” agencies and educate prospects on digital transformation and the specific technology solutions needed to facilitate it.

Following the money or funding will be too late. Resellers will have to anticipate customers’ changing priorities in advance of funding and figure out how to best position their offerings to win the business.

They’ll also need to build a strategic financial plan and funding sources to support pricing of solutions on a consumption basis—and establish attractive credit terms to make it easier for customers to say yes.

How Can Ingram Micro Help You?

Ingram Micro’s public sector team is adept at engaging virtually and has mastered the tools of remote collaboration. We leverage LinkedIn, Twitter and other social media tools to extend the reach of our reseller partners and OEM vendors.

Our dedicated team of subject matter experts is laser focused on creating value in the public sector IT market, and can offer end user insights and timely market intelligence that can really make a difference in your business development efforts. Always anticipating changing priorities, we’re continually expanding and tailoring our solutions to meet the needs of federal, state, and local government agencies and education institutions.

As the world’s largest IT distributor and technology aggregator, Ingram Micro also has extensive financial resources you can leverage to win business. Our financial experts can assist you in creatively packaging and pricing solutions on a consumption basis—with lucrative credit terms to address the challenges of today’s market.

In short, we’re committed to doing whatever it takes to help you put your best bid forward on that contract you’re looking to land. Selling to the public sector is always challenging, to be sure, but we help make the sales process easier on you.

Tony Celeste is Executive Director and General Manager, Public Sector, at Ingram Micro.

This guest blog is part of a Channel Futures sponsorship.

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