FEATURE
Pay-as-you-go service contracts are increasingly popular, allowing agencies to align IT spending directly with usage and avoid the waste associated with overprovisioned systems. This approach resonates with public administrators under pressure to show taxpayers a clear return on investment.
Automation is also delivering cost savings by streamlining workflows, improving workforce efficiency and reducing manual intervention in routine processes. In a resource-constrained environment, these efficiencies are crucial.“ Advanced cloud service models enable public agencies to improve operations despite significant, ongoing resource limitations,” said Shashank Rajmane, Senior Manager and Principal Analyst, ISG Provider Lens Research, and author of the report.“ Ultimately, technology improvements allow them to make government processes quicker and more intuitive for users, fostering greater engagement with citizens.”
Data management emerges as a critical capability
The ability to manage and leverage data is now central to public sector performance.
Comprehensive data solutions from MSPs – covering storage, advanced analytics and security – are enabling agencies to organise and protect sensitive information while deriving actionable insights, the report says.
For SLED organisations, effective data management underpins more informed policy decisions and enables evidence-based governance. By integrating analytics into daily operations, agencies can forecast needs, measure programme effectiveness and deliver services more effectively.
One municipal agency, for example, has applied advanced analytics to transportation data, identifying patterns of congestion and improving public transit scheduling. These insights not only improve efficiency but also reduce costs and environmental impact.
Why modernisation is urgent approximately US $ 150 billion by the end of 2025, with expectations to surpass US $ 170 billion by 2028. The report finds, however, that growth is moderating due to fiscal pressures and shifting political priorities.
Despite increased federal funding through initiatives like the Technology Modernization Fund, spending as a share of GDP remains below historical levels. This financial reality means agencies often must choose between maintaining essential services and investing in transformative IT projects.
In many cases, the decision to delay modernisation perpetuates the risks associated with ageing systems – security vulnerabilities, high maintenance costs and difficulty integrating with new platforms. Several high-profile system outages in recent years have highlighted the cost of inaction, reinforcing the urgency of cloud transformation.
Security: A top priority in the cloud shift
The report acknowledges older infrastructures lack the built-in security controls of modern systems, leaving agencies more vulnerable to cyberattacks. Public sector data includes sensitive citizen information and, in some cases, national security data. A breach could erode public trust and have farreaching consequences.
Agencies must also comply with rigorous frameworks such as the Federal Information Security Modernization Act( FISMA) and the National Institute of Standards and Technology( NIST) guidelines. Meeting these requirements involves continuous monitoring, stringent controls and detailed reporting – activities that demand skilled resources and specialized tools.
This is where hybrid cloud models provide an advantage. Providers can offer layered defences such as Zero-Trust security, encryption at rest and in transit, and continuous vulnerability scanning. Some also incorporate AI-driven threat detection, helping agencies stay ahead of increasingly sophisticated attacks.
Breaking down silos
Market projections indicate the US SLED IT infrastructure services market will reach
The report recognises one of the most persistent challenges in public sector IT is the existence of data
26 INTELLIGENT GOV. TECH www. intelligentgov. tech.