Government Insights Forecasts State and Local IT Spending by Program Areas ; Social Services Leading the Way

FALLS CHURCH, VA., AUGUST 27, 2007 – A new state and local government spending guide and market forecast released by Government Insights, an IDC Company, reports that social services will lead state IT spending over the next five years.

"We are seeing states and local governments typically invest about 21% of their IT budgets in technology to assist constituents in obtaining better delivery of health and other social services," says Shawn McCarthy, director, Government Vendor programs at Government Insights. "The next largest category for IT spending is in law enforcement and citizen protection, which includes courts, justice, jails and police. These functions represent about 12.7% of state IT spending and 12.8% of local government IT spending."

McCarthy adds, "A lot of system upgrades are needed to help cities and states share homeland security-related information. In some cases federal grant money is available to help, but in many cases state and local governments are footing the bill themselves."

The report shows that state and local governments will spend $23.6 billion in 2007 on IT hardware, software and services, and forecasts a 5% compound annual growth rate (CAGR) with spending expected to reach $28.2 billion in 2011. The fastest growing segment is IT software at 9.2% CAGR with the subcategories of Application Development and Deployment, and System Infrastructure Software each growing at over 10% CAGR during this period.

"Right now, many state and local government offices are upgrading their network capacity and working to consolidate redundant systems. By making such investments now, there is great potential to trim costs for the long-term, but such investments can be expensive in the short-term," McCarthy adds.

This report, U.S. State and Local Government IT Spending Guide, 2006–2011 (Doc #GI208182), provides a segmentation of top-line IT spending forecasts for state and local governments in the 50 states plus the District of Columbia. IT spending is categorized by IT hardware, software and services, each with additional subcategories. The spending data is provided in a pivot table with thousands of line items. To provide a more comprehensive view of state IT and program spending priorities, Government Insights is now also reporting state government IT spending estimates for 15 common key governmental functional segments. These include, in addition to those already mentioned, agriculture, transportation and motor vehicle registration, emergency response and fire, continuing education and workforce training, and public utilities as examples. This report is available at .

About Government Insights, an IDC Company

Government Insights, an IDC company, provides government organizations and IT vendors who serve them with research-based advisory and consulting services that enable government executives to maximize the value of their technology investments; minimize technology risk through accurate planning; benchmark themselves against industry peers; adopt industry best practices for organizational/technology alignment; make more informed technology decisions; and drive technology-enabled performance and innovation. Government Insights provides full coverage of the government value chain, with special emphasis on developing and employing strategies that leverage IT investments to maximize organizational performance. Staffed by senior analysts with significant experience in government, Government Insights provides a portfolio of research and advisory services that are relevant to the needs of both the government and IT vendor communities. IDC is a subsidiary of IDG, the world's leading technology media, research and events company.

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