In a new study by Market Connections, Inc. and Professional Services Council (PSC), 70 percent of government IT decision-makers report moderate to high impact of the “convergence” of technology and professional services, or consumption-based “as a service” acquisition approaches, on the government marketplace. The study benchmarks the status of convergence and reveals gaps in adoption and understanding between government and the contractors who serve them. Both government decision-makers and contractors agree that convergence is causing a shift in how government buys and industry provides solutions, yet government respondents reveal significant perceived barriers to adoption such as security risks and cost concerns. “Convergence represents a fundamental shift in the way government is doing and will continue to do business,” said Stan Soloway, PSC president. “This will require adjustments to requirements and acquisition models, and companies will have to work with their customers to help them understand and fully leverage the benefits of ‘as a service’ models.”

1. The Impact of Convergence on Government Acquisition
We are in the early stages of awareness
and understanding, and contractors are ahead
of government.
Convergence is about more than IT.
There are signicant disconnects between
industry opportunity areas and government
adoption plans.
Convergence brings both opportunities
and barriers to adoption.
Opportunity
Areas for
“As A Service”
Contractors see “as a service” opportunities
at a signicantly greater rate than government
says they plan to implement.
25% 56%
21% 41%
21% 58%
21% 64%
20% 43%
17% 35%
For more information visit
www.marketconnectionsinc.com and www.pscouncil.org
Barriers to XaaS Adoption
Perceived barriers are signicantly slowing
widespread adoption of converged solutions
and consumption-based approaches.
LACK OF PROCUREMENT GUIDANCE
POORLY DEFINED REQUIREMENTS
SECURITY ISSUES/RISKS
BUDGET CONSTRAINTS
16% 31%
36% 21%
60% 46%
45% 24%
Important Characteristics
of Contractors Delivering
Converged Solutions
Government and contractors disagree
on the importance of a few key
characteristics for contractors delivering
converged solutions.
GOVERNMENT CONTRACTORS
86% 90%
Subject matter
expertise
84% 92%
Secure solutions
84% 89%
Cost competitive
81% 93%
Understand
customer mission
“Declining agency budgets
are driving re-evaluation
of how we acquire technology
and services.”
KEY FINDINGS
70%
of government reports moderate to
high impact, current use and
near-term plans reect signicantly
lower levels of adoption.
Federal “As A Service”
Current Use
and Near-term Plans
Currently using or planning to
implement in the next months
% COMMUNICATIONS
% SOFTWARE
% INFRASTRUCTURE
% MONITORING
% PLATFORM
% TRAINING
% OTHER
© 2014 Market Connections, Inc.
0 20 40 60 80 100
IMPACT
OF CONVERGENCE
TECHNOLOGY CONVERGENCE
convergence differ from contractors’.
TREND
T O P F I V E T R E N D S
Government’s perceptions of
It is important for a federal agency to
work with a company that can deliver
integrated services and technology
TREND
The lines between technology and
services are beginning to blur when
looking to buy IT or mission services
TREND
Traditional technology vendors are now 65% 68%
providing their products as services
TREND
Federal agencies/my agency are behind
the technology curve compared to the
private sector
TREND
Companies will have fewer opportunities
to sell hardware and software separately
from services as consumption-based
acquisition models like cloud computing
take hold in government.
75% 85%
66% 79%
58% 80%
53% 67%