IT Industry Gets Boost

By eweek  |  Posted 2001-10-08

The Sept. 11 terrorist attacks will result in a boost to the roughly $40 billion the federal government spends each year on IT, with Web-based initiatives expected to gain a higher profile.

"In the wake of the tragedy, well see more focus on Web-based access to anything," said Zip Brown, vice president of the eGovernment Solutions Group of American Management Systems in Fairfax, Va.

"I think the current situation will really reinforce the requirement of anytime, anyplace access to information," said Robert Lohfeld, director of the Information Systems Group of OAO, a large systems integrator. "There are so many projects that they are hard to keep track of, and they happen with little fanfare. What we are seeing is a re-engineering of the systems behind the Internet interface. The real trick is building the transaction set that goes behind the pretty picture."

In the coming years, "thats where the bulk of the money will be," Lohfeld said.

More federal money will be spent on information security, data backup and storage, and more sweeping remote access to federal Web sites by employees, analysts said.

"In the past month, there has been a heightened interest in information security, and we believe the Congress will have to deal with that head on, and give extra money to agencies," Lohfeld said. "Its sort of like Y2K [year 2000]."

Its too early to discern precisely how President George W. Bushs $40 billion emergency spending plan will translate into business opportunities for interactive technology companies, though its understood that some of the money will be spent on IT.

"Very clearly, there is going to be a huge push for secure systems and backup recovery systems," said Bruce Leinster, IBM Global Services director of contracts and negotiations.

According to a study by Federal Sources Inc., which researches federal marketplaces, spending on information assurance services will jump from about $1.33 billion next year to $1.64 billion in 2003 and $2.3 billion in 2004.

Currently, outside contractors perform about 34 percent of the work on federal IT projects, said Barb Gomolski, Gartners director of research.

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