Contents:

CHAPTER 1 EXECUTIVE SUMMARY Introduction Market context Customer focus Action points CHAPTER 2 INTRODUCTION What is this report about? Who is the target reader? How to use this report CHAPTER 3 MARKET CONTEXT Introduction Key findings State and local government technology budget analysis Spending by technology segment: state and local government will shift spending towards services and software Spending by function: state and local governments place top priority on public safety Spending by level of government: state vs local Technology spending by state governments Spending by state: population is not the only determinant of government IT spending Spending by technology segment: state government technology mix will shift towards software and services Spending by function: state governments focus on health and human services Technology spending by local governments Spending by technology segment: local government spending on services and software is growing Spending by function: public safety is primary recipient in local government Trends in state and local government IT spending Renewed interest in consolidation Increasing influence over technology decision-making Taking e-government to the next level Changing role of federal funds CHAPTER 4 COMPETITIVE DYNAMICS Introduction Key findings Overview of vendors Profiles of select systems integrators in the US state and local government market State- and local-focused IT vendors rank highly in market: ACS, CGI-AMS, Maximus Broad IT services firms have mixed results: EDS, IBM, Unisys Federal contractors are expanding state and local offerings: Lockheed Martin, Northrop Grumman Consulting firms racing into state and local government market: Accenture, BearingPoint CHAPTER 5 ACTION POINTS Introduction Follow the federal money Investigate new sources of funding Seek out regional projects, but be prepared for more upfront evaluation Focus on small-scale outsourcing at the local level Be willing to enter partnerships either as the prime or the sub CHAPTER 6 APPENDIX Research methodology References Related readings SPP writing team LIST OF TABLES Table 1: US state and local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) Table 2: US state and local government IT spending by function, FY2004-FY2009 ($M) Table 3: US state government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) Table 4: US state government IT spending by function, FY2004-FY2009 ($M) Table 5: US local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) Table 6: US local government IT spending by function, FY2004-FY2009 ($M) LIST OF FIGURES Figure 1: US state and local government IT spending: vendor opportunity vs internal spending, FY2004-FY2009 ($B) Figure 2: US state and local government IT vendor opportunity by technology segment, FY2004-FY2009 ($B) Figure 3: US state and local government IT spending by function, FY2004 Figure 4: US state government IT spending by technology segment, FY2004 Figure 5: US state government IT spending by technology segment, FY2009 Figure 6: US state government IT spending: vendor opportunity vs total spending, FY2004-FY2009 ($B) Figure 7: US state government IT vendor opportunity by technology segment, FY2004-FY2009 (% of total) Figure 8: US state government IT spending by function, FY2004 Figure 9: US local government IT spending by technology segment, FY2004 Figure 10: US local government IT spending by technology segment, FY2009 Figure 11: US local government IT vendor opportunity by technology segment, FY2004-FY2009 ($M) Figure 12: US local government IT spending by function, FY2004 Figure 13: State agencies are mainly influenced by the state itself, while local agencies feel influence from multiple sources Figure 14: State and local agencies expect to receive federal funds for public safety projects