With TBR’s Federal IT Services market and competitive intelligence research, understand and build strategies around industry trends to maximize addressable opportunity and minimize disruption as a core industry undergoes unprecedented change.
Gain insight into how defense contractors are going to market, forming alliances, planning for the future and more as they provide solutions and services tailored to customer objectives ranging from night vision goggles and underwater sensors to F-35s and Low-Earth Orbit satellite constellations.
Learn how federal contractors are approaching Joint All Domain Command and Control (JADC2), hypersonic technology, the new age space race, digital engineering and the evolving international defense scene.
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Trends we’re watching in 2024:
- Will there be a government shutdown in federal fiscal 2024? How would it impact federal systems integrators?
- Is additional budget turmoil expected in 2024 in the U.S. federal contracting sector?
- Will there be a revival in M&A activity among the leading federal IT contractors?
- The competition for IT talent has eased, but remains brisk in federal IT. How are federal IT vendors adapting their human resource strategies to remain employers of choice?
- Will the 2024 U.S. Presidential election impact the federal IT market?
- How are alliance relationships between federal systems integrators and commercially focused providers of cloud, analytics and other emerging technologies continuing to evolve?
- How will GenAI impact the federal IT market in 2024?
Benchmark
TBR’s Federal IT Services benchmark research provides clients a comparison of vendor performance in a market, including analysis on vendor strategies, financial performance, go-to-market and resource management. The research graphically portrays comparisons of vendors by myriad metrics, calling out leaders, laggards and business models.
Federal IT Services Benchmark
The federal budget landscape was persistently erratic in 2022, with unpredictable lags in technology outlays hampering IT vendor growth. Budget turmoil may linger into 2023, but federal agencies’ appetite for digital transformation and IT innovation remains intact, fueling a positive outlook for accelerating growth on a near-term horizon.
Ecosystem Report
Ecosystem reports compile data and analysis from multiple streams of TBR coverage to assess, quantify and model revenues, team compositions, go-to-market strategies and other qualitative insights, including accreditation and training of sell-through and sell-with partnerships, channels or alliances across global ICT markets.
U.S. Federal Cloud Ecosystem Report
Vendor Analysis
TBR’s Federal IT Services vendor reports, profiles and snapshots provide deep-dive analysis into a single vendor across corporate strategies, tactics, SWOT analysis, financials, go-to-market strategies and resource strategies.
While the collective operating margin had immediately shown signs of improvement following NG’s divestment of the Federal IT & Mission Support Services lines in February 2021, it tumbled from 15.2% in 2Q22 to 13.8% in 3Q22, the same level seen in 1Q21. DS and MS have been impacted by inflation and lingering industrywide supply chain pressures while also struggling to maximize their workforce’s productivity. With indicators suggesting that the 1H22 labor availability issues are beginning to abate, the contractor is investing in stabilizing its segments’ supply chains and supporting employees with productivity-enhancing tools like digital engineering. DS’ and MS’ respective FY22 performances will finish below expectations, but MS is poised to rebound in FY23.
Accenture Federal Services
Booz Allen Hamilton
CACI International
CGI Federal Vendor Profile
General Dynamics Technologies
IBM Federal Vendor Profile
ICF International
Leidos
Maximus
Peraton Vendor Profile
SAIC
Could M&A Activity in the Federal IT Services Market Surge in 2025?
When the M&A environment actually begins to ramp up, we anticipate that vendors will prioritize acquiring peers that can expand their niche capabilities in AI, cloud, cyber, electronic warfare (EW) and other areas as the DOD, IC and civilian agencies are showing more interest in emerging technologies. While private equity firms remain interested in expanding their capabilities in these areas as well, they will be under greater scrutiny by the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) Antitrust Division. These agencies published a request for information in May to assess how serial acquisitions are impacting competition in multiple industries including defense and cybersecurity.
The Main Reason There Will not be an AI-centric Contract Vehicle in the Federal IT Services Space
As vendors seek to capitalize on the growing demand for AI services, their relationships with technology giants like Amazon Web Services (Nasdaq: AMZN), Google (Nasdaq: GOOG) and Microsoft (Nasdaq: MSFT) will also become increasingly crucial. Successful vendors need to deepen their partnerships and demonstrate how their technologies can augment the hyperscaler platforms that agencies use. Having access to these giants lends vendors credibility while giving them access to the robust technologies and insight into how those technologies are being best used in the commercial space.
