The greatest frontier for application modernization, SOA, cloud, and virtualization is the enormous collection of legacy systems which run the US federal government. However, some of these efforts may run up more costs than they save. In a new post, IDC's Thom Rubel looked at some recent efforts to re-evaluate or put the brakes on some federal financial systems modernization projects.
Rubel reports some consternation among vendors in the industry after The Wall Street Journal broke the news last week. On June 28th, the US Office of Management & Budget (OMB) -- which reviews the cost-effectiveness of all federal programs -- called for the review of all (approximately 30) financial systems modernization project currently underway, totaling $3 billion. According to Rubel, the directive instructs federal agencies to "avoid investments in new contracts and task orders" on these projects. Federal CIO Vivek Kundra is also reviewing about $10 billion in other existing IT projects that are currently behind schedule and/or over budget.
The bottom line? This kind of move is good for the federal government, which spends more than $80 billion a year on IT. The era of business-as-usual with out-of-control federal IT spending is over. And it won't hurt the industry -- it fact, it will barely make a dent in the overall pace of IT spending. After all, as Rubel observes, "the U.S. federal government IT market is still enormous and is offering up new opportunities in evolving business areas for vendor solutions."
To add to Rubel's thoughts, the moves Kundra has been making to modernize, streamline, and increase the efficiency of federal IT have been well thought out and reflective of current best practices thinking. Get the government out of the business of managing and maintaining IT where feasible, and promote internal cloud computing, supported by such initiatives as Apps.gov.