Happy New Year! I’d like to say a special Thank You to JD Kathuria and my friends at WashingtonExec for publishing my look into the crystal ball for 2012. Here is the Post:
2012 is here, and with it comes big changes for the Federal IT industry. WashingtonExec gave local executives the opportunity to share their thoughts on where they see the government contracting industry headed.
Tien Wong, Chairman and CEO of Lore Systems and Opus8, gave WashingtonExec six factors that he believes will affect the 2012 Washington, D.C. entrepreneur and government contracting communities.
1. IT SPENDING and THE ECONOMY – IT spending will increase both in commercial and government sectors, particularly in infrastructure, cloud, and mobility. We have seen an uptick in business at Lore in the last quarter particularly from our commercial clients. In conversations with many clients, I believe that overall confidence in the economy is improving a lot!
2. PRESIDENTIAL ELECTION – Obama will be re-elected. If the economy is improving, that favors Obama.
3. STARTUPS – Startups in the DC region will continue to blossom. The ecosystem is as active and sanguine as it has been in the past 10 years. You are seeing groups like Startup America, Startup Maryland, Startup Virginia, FounderCorps, and established and new incubators take a keen interest in our region. Angels are investing, and groups like Virginia’s CIT and Maryland’s DBED will be investing new allocations of seed money.
4. CLOUD COMPUTING – Cloud adoption in the federal government will accelerate both internally via virtual private clouds, and via commercial providers with new FedRAMP guidelines and the award of commercial Infrastructure as a Service (IaaS) contracts (GSA’s IaaS and the Army’s APC2, for example). The economic and performance benefits are far too great for cloud not to be aggressively adopted well into the future.
5. DATACENTER CONSOLIDATION – Regarding the federal government’s datacenter consolidation efforts, the government will successfully close many datacenters. However, I doubt they will hit their goals in 2012 because many individual application owners and datacenter operators are not as cooperative in providing information and complying. Further, there’s a cost to consolidating and there are limited funds to achieve this, so you’ll likely see a lot of funding come out of O&M budgets.
6. SMALL BUSINESS – Because of drastically reduced budgets, the government will rely on small business and entrepreneurs for creative ideas to cut costs, drive productivity, and improve performance. The DoD customer has been very open to the commercial best practices Lore is bringing to the table re: datacenter consolidation and application migration. In addition, small business is more nimble and unencumbered by the fixed costs of the “Bigs,” so we can offer creative pricing structures, and ways for the government to buy from us. We will see more firm fixed price offers, and shared-risk pricing, which inevitably will save the taxpayers money.
Please let me know what you think about these predictions. Thanks for reading, and please subscribe to my Blog! All the best for an awesome 2012!
Featured image courtesy of Mike Licht, notionscapital.com, licensed via creative commons.
WINNING IDEAS - Tien Wong's Blog 
Second, the economic drivers for government data centers are subtly different from those of commercial entities. In corporations, the primary driver is saving money. In government, it’s all about doing more with the budget you have, says Burke of Govplace. The demand on resources is exceeding the supply at government data centers, so agencies try to support more applications and services within existing budgets.
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This is a great post, Tien. I did have a few questions though. I personally don’t see the economy improving all that much. In that case, I believe Obama will not win.
Also, what’s your take on cloud computing? I see it as more dangerous than productive. Suppose the CIA starts using the cloud, don’t you think that could lead to massive leaks of information?
And last, small businesses are getting destroyed out here in California. They cannot survive at all. However, I do see small businesses doing well in New York and places like so.
Regardless, these are some great predictions. Keep up the good work
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Thanks for your comment. The cloud provides more security, as counterintuitive as that may seem. Think about it. Remember the old mainframe or ASP days? Centralized control, reporting, and administration; fewer touchpoints, etc. The key is to insure these are all locked down. I do see your point about potential for substantial breaches since everything will reside in one place, as opposed to a distributed environment where you have a much greater chance of a breach, but the damage from that would be less. Regarding the economy and the Presidential election, if the economy does not improve, then it will be a real dogfight. Regardless, things will be very interesting!
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Thanks for sharing your predictions Tien, no doubt these will likely come to pass. Do not want to push you out on a limb, but anything more risky/iffy you have an eye on? Just curious. Happy New Year!
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Hi Mike, thanks. There’s a ton of risk in the economy and for businesses: Iran, N Korea, real estate values, the Eurozone, etc. Plus, the world and USA are still “overleveraged” so the deleveraging process will have its effects. Government spending and government policies are an unknown, but they can move markets. I’m sort of watching all of this, but really in terms of business, the focus is on the stuff we can CONTROL ourselves. These are interesting times, and scary times too, but there are lots of opportunity for entrepreneurs in times of distress and flux. Wishing you and yours an awesome 2012!
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Hey Tien. Thanks for the great post! Very insightful. I thought I would chime in here with one relevant to one on your list. Cloud Computing.
Thank you Alex Gutman for your Comment via LinkedIn:
For IT professionals, the big question is whether their operations are running efficiently. Now with increased adoption of cloud-based systems, the IT world can look forward to see the consolidation of data across industries. This will allow vendors, offering cloud-based services, to provide added-value with proven benchmark information, that can smooth cloud management operations and can improve everyone’s business.
I invite you to check out our blog and article on Business Computing World:
Business Computing World: Cloud Will Provide New Opportunity for Benchmarking Insights
http://www.evolven.com/blog/cloud-will-provide-new-opportunity-for-benchmarking-insights.html
Wishing you all a happy, healthy and productive 2012!
Best,
Alex Gutman
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