Federal IT Market Grew by 9.5 Percent in FY18, Report Says

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The Federal IT market grew by 9.5 percent in fiscal year 2018 to reach a total of $64.7 billion dollars, which marks an all-time high, according to an analysis by Bloomberg Government.

The analysis found that IT spending in the Department of Defense grew 12 percent over FY17 to $33.8 billion, the most since fiscal year 2012, while civilian agency spending grew by around seven percent over FY17 to $30.8 billion, the highest amount ever after accounting for inflation.

The bulk of Federal IT spending remains focused on technology services, which reached $47.4 billion in FY18, a 10 percent increase, and representing approximately 73 percent of the total market.

However, overall growth was bolstered by gains in other key markets, including digital services, cybersecurity, and cloud. Digital services grew 17 percent to $4.2 billion, cybersecurity spending grew by around seven percent to $6.4 billion, and cloud services jumped to $4.1 billion on a nine percent growth at civilian agencies and a whopping 30 percent pop at DoD.

Some emerging technologies, while still a small part of the Federal IT market, saw large growth in FY18. Artificial intelligence spending grew by over 57 percent to reach $592 million government-wide, while data analytics grew by 24 percent to reach $2.6 billion.

The analysis also showed certain departments making larger leaps in IT spending, with the Air Force and the departments of Veterans Affairs, Education, State, and Treasury all highlighted as having double digit growth.

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