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IT budgets in the public sector have taken a beating since late 2010, with growth stalling due to defense cuts and budgetary turmoil throughout 2011. Several big vendors saw revenues decline, while a select handful adjusted their course in response to market conditions and managed to grow their top lines. TBR tracks 16 key players in this vertical on a quarterly basis, and our data and insight indicates that in 2011:
• IT services firms serving the public sector realigned portfolios to follow the budgetary reprioritizations in the federal government’s IT spending;
• Vendors were compelled to focus on margin performance in lieu of top-line growth through operational excellence and a focus on strong contract performance;
• Some companies are looking beyond their core market in the U.S., hoping to leverage their capabilities to gain traction with international government clients as well as new clients in the commercial sector.