Public sector entities besides the U.S. federal government bear a disproportionate share of pandemic-related impacts

The predominance of the U.S. federal market is on display in Figure 1 as most of the observed deceleration owes to the diminishing impact of strategic acquisitions made by federal IT vendors prior to 2019 and the sharp slowdown in overall M&A through 1Q20. The latter trend will be exacerbated by the coronavirus outbreak as acquisition activity grinds to a near complete halt in conjunction with the turbulence in global capital markets. IT spending by the civilian agencies of international governments was also affected by the pandemic, with some ongoing IT programs furloughed temporarily or indefinitely, while others saw their funding redirected to emergency public health initiatives in response to the outbreak. Buffering these headwinds was the continuance of defense modernization programs, particularly in Europe, Australia and the Middle East, though the negative effects of declining oil prices may impact the latter market.

Figure 1

TBR’s Public Sector IT Services Benchmark compares and contrasts the included vendors’ go-to-market models, recent investments and key deal wins. Additionally, the benchmark reviews a number of key financial performance metrics and highlights vendors that have been particularly successful in expanding market share and improving profitability.

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