Ready or not, software is eating the government contracting world

advanced-visualizationAs readers of CTOvision you no doubt track the trends and are as aware as any of how software transforms industries, sometimes in shockingly brutal ways. I take no pleasure in telling any of you that my focus industry, the advanced technology sector around national security missions, is about to see massive, at times very harsh transformation because of this “software eats the world” megatrend. But I do take pleasure in giving advanced warning to those who should be preparing for this. We are all responsible for our own destiny even in periods of change. So I’ll provide my context and recap some of the things I believe people should be doing to accelerate smart change in enterprises and prepare for better personal futures.

First, some context.  We previously articulated seven major trends we believe would be shaping 2013. They are:

1) Big Data solutions will show a decided shift towards user-focused solutions. There is plenty of room for continued innovation on the infrastructure too, but in 2013 expect very positive developments in user facing solutions, enabling self-service analytics in degrees not seen before.

2) Enterprises will expect analytical tools that enable users to create and iterate over their own models. The state of the art of analytical tools has evolved significantly over the last 2 years but most enterprises have not kept up. Capabilities that let analysts create, modify, share and iterate over their own models, without involving developers or the IT department, will explode into enterprises today. Users will access these enterprise capabilities through a piece of software they already have on their computer– a web browser.

3) Cloud computing security will see significant enhancements due to new distributed storage solutions that disrupt old security models. There are many other factors at play in cybersecurity, and we are keenly aware that for decades every improvement in a technological approach to security has been met with counters from adversaries. But the virtues of new distributed storage methods (like those here) are powerful and can significantly improve how data is defended and backed up and accessed.

4) The “Internet of Things” will accelerate networking technologies into more household devices than most of us imagine. This will drive great functionality, but will come with security risks. You can now buy Internet connected garage door openersfront door locks and entire home automation suites, all of which can be controlled from any Internet device (and many of which can be connected to the popular Internet connector IFTTT). All also come with mobile apps. In each case we have seen that security has been given at least some consideration in these devices, but in no case have we seen what we believe to be acceptable risk. This is important for enterprise technologists since the same technologies will infiltrate the workspace.

5) Mobile Risk Management solutions aimed at mobile devices will expand their functionality and utility and will reduce risk in the world of the “Internet of Things.” As cases of unauthorized access lead to physical break-ins we believe new risk management tools and increased security will be added to these systems and 2013 will probably be the year this happens.

6) Technologists in developed countries will be expected to be experts on technological ethics. Citizens will increasingly expect us to help them think through the ethical dimensions of their choices, and businesses that want to survive will consider how their technology serves the community. This trend will be seen everywhere where policy has not kept up with technology, so this is especially important in government.

7) In 2013 software will begin to”eat” the federal contractor industry, with more cuts to contractor workforce from this factor than through budget cuts. This concept of software “eating” industries was highlighted by Marc Andreessen in an August 2011 essay titled “Why Software Is Eating The World.”  As he noted in that essay, there has been dramatic positive change in the national security world because of software. But to fed watchers it is pretty clear that this shift is about to accelerate. The accelerants of the shift in the federal space include significant downward pressure on budgets and the impact this is having on concepts the government is putting in place.  The combination of budget pressures and incredibly compelling capabilities will definitely make this a year of change in the government contracting space.  As software eats our world we will all have some decisions to make. If you want to stay mission focused, do you want to be on the side of the eater or the eaten? And if you are a technologist in the workforce do you want to align yourself with a company that has a forward thinking strategic approach to the market or one that tries to stay with old models? These are all important questions to think through.

Of all the above, it is number seven that seems poised to cause the most disruption in the federal contracting space. One major defense contractor, Rockwell Collins, summed up the current environment of budget pressures as “unprecedented uncertainty for all businesses that support the department of defense.”  Most others have made similar statements. The accelerant of budget pressure is forcing defense contractors to look for cost savings, and this is already resulting in layoffs. Budget pressures are also driving the integrators to look for new, smart software solutions. There have already been fast investments in new software for automating and cloud-basing proposal operations management software and automating and cloud-basing vendor management and other formerly human intensive tasks. But now the pressure is on for the big integrators to find even more uses of software to automate and cut costs. Software based self service in the HR department is huge. And software based contract management is and legal documents are also poised for dramatic growth in the big integrators. Automated management dashboards are hot in several companies. Most have also adopted capabilities like video tele collaboration to cut down on travel for meetings. In all those areas software has positioned the integrators for even more cost saving layoffs.

And the government too is in a cycle of searching everywhere for money to save while still serving missions and software is playing a big role. In a recent FCW report a investigative reporter interviewing conference attendees deduced that the CIA was awarding a large cloud computing contract to Amazon (see Frank Konkel’s “Sources: Amazon and CIA ink cloud deal“).  This would not be Amazon’s first deal in government support but may well be their largest. Many others have been providing increasingly larger levels of cloud based support to government missions and in doing so are saving the government (and taxpayers) millions of dollars.  According to GSA, over 80 companies are in their FedRamp certification pipeline, with 15 or so about to be accredited for FedRamp level support.

So, as predicted, it is budget pressures that are driving this major disruption of software eating the government contracting world. But the software was coming whether or not the budget pressures were there. The budget pressures are just requiring leaders to lead and managers to manage.

Maybe the most important thing is for all parties to think through how to best handle themselves while software eats our world.  My personal hopes:

  • I hope the Government moves fast to save taxpayer dollars and bring on new software and new cloud computing capabilities to better agency performance,
  • I hope the federal contracting world of big and small integrators and services firms realize that change is required to continue to serve in this dynamic market, and
  • I hope employees of both government and industry realize that there is no such thing as job security in this environment and therefore you should devote at least some of your day every day to improving your ability to perform in a new world. That will keep you as marketable as possible if your job is automated from underneath you.

Thoughts on the above?

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About Bob Gourley

Bob Gourley is the publisher of CTOvision.com and DelphiBrief.com and the new analysis focused Analyst One Bob's background is as an all source intelligence analyst and an enterprise CTO. Find him on Twitter at @BobGourley