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

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

Written by Ingram Micro Guest Blogger
February 18, 2021

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

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