No Result
View All Result
  • Login
Tuesday, February 17, 2026
FeeOnlyNews.com
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading
No Result
View All Result
FeeOnlyNews.com
No Result
View All Result
Home Market Analysis

The US Government Tech Market Enters A New Phase Of Change

by FeeOnlyNews.com
5 days ago
in Market Analysis
Reading Time: 4 mins read
A A
0
The US Government Tech Market Enters A New Phase Of Change
Share on FacebookShare on TwitterShare on LInkedIn


Our latest US Tech Forecast 2026: What It Means For Government report projects that technology spending for the entire US government sector, including staff costs, will reach $357 billion in 2026, up from $343 billion in 2025, representing 4% year-over-year growth. Government technology will account for 12.3% of total US tech spending of $2.9 trillion in 2026.

This modest growth arrives at a moment of profound technological realignment. Political preferences matter far less than the structural forces now hitting the public sector at speed. We have been here before: Reinvention efforts during the Clinton-Gore era dragged federal procurement into the modern age. Then the Technology Modernization Fund and FITARA pushed business, mission, and technology leaders in federal agencies to rethink accountability, governance, and technical debt. Each shift redefined how government viewed technology’s role in mission delivery, first in Washington and then at the state and local levels.

But today’s context is more demanding. The United States is locked in a global race to capture AI advantage, and public expectations for government performance, resilience, and trust rise in parallel with accelerating private-sector capabilities. Although it’s the same dynamic as the digital business era, the implications for government tech decision-making are more immediate and far-reaching.

In our new report, we highlight three forces that define how the world’s largest public-sector technology market will evolve over the coming year and beyond.

AI Is Becoming The Central Organizing Force In Government Tech Strategy

AI is no longer another item on an innovation roadmap. It is becoming the organizing principle behind investment decisions, operating models, and oversight structures.

Agencies are consolidating fragmented data estates — a prerequisite for training, validating, and governing models responsibly. Benefits, public safety, and permitting agencies are beginning to pilot agentic systems that support caseworkers and analysts, signaling a move from incremental automation to genuine capability uplift.

Spending patterns reflect this shift. Cloud foundations, analytics platforms, API management, and AI governance tooling show steady growth, while traditional enterprise software categories flatten. The throughline is clear: AI readiness is future service delivery readiness, and agencies that modernized early will break away from those still stuck in brittle, siloed architectures.

To guide safe adoption, agencies will increasingly turn to responsible and explainable AI practices and frameworks like Forrester’s AEGIS for securing agentic AI architectures.

Legacy Complexity Collides With AI-Driven Modernization Pressure

Government systems carry decades of technical sediment — entitlement engines, licensing systems, revenue platforms — running on architectures never designed for real-time data flows or AI workloads.

Now AI is forcing agencies to confront what they once deferred. Large federal departments are launching modernization programs once considered too risky or too costly. State and local governments are adopting coexistence strategies to stabilize the old while progressively building the new.

Oversight bodies are raising expectations: “Show us your data lineage,” “demonstrate model assurance,” “prove your resilience posture.” These demands echo the lessons from incidents like Michigan’s AI-driven unemployment fraud scandal, where an automated system wrongly accused 40,000 claimants of fraud. This is modernization under pressure — uneven, often painful, but unavoidable. Agencies that recognize this as a strategic inflection point, not an episodic upgrade cycle, will create the conditions for durable transformation.

Government Spending Shifts From Tools To Integrated Capability Ecosystems

The era of standalone point solutions is ending. Agencies want integrated capability stacks that reduce complexity and deliver measurable mission outcomes.

This is accelerating investment in cloud infrastructure, data platforms, cybersecurity resilience layers, and agentic AI orchestration. Appetite for bespoke or siloed systems is shrinking.

This shift aligns with the “Buy American” emphasis in the President’s Management Agenda, where supply chain provenance, software bill of materials transparency, and domestic hosting now shape procurement. Vendors with US-based cloud regions or verifiable sourcing will see increased opportunity, particularly in federal and defense-adjacent markets.

Cross-boundary ecosystems are already emerging in public safety, health, and benefits delivery, where interoperability, composability, and trust matter more than feature lists. Examples include the USAi secure generative AI evaluation environment launched by the General Services Administration and multiagency customer experience and employee experience initiatives, such as Miami-Dade County’s AI-enabled service modernization.

The winners will be those who help government simplify complexity, accelerate assurance, and deliver mission impact — not those who merely ship software. And many of these winners may not be the traditional software vendors, as core civilian and defense missions increasingly align under growing geopolitical risk.

What This Means For Government Leaders And Vendors

Government leaders must move past incremental pilots and build the foundations for durable transformation: unified data estates, modern engineering practices, strong governance, responsible AI oversight, and resilient architectures. Vendors must prove integration readiness, supply chain resilience, and a credible AI governance story.

Legislators are already raising the bar. New York’s RAISE Act and California’s Transparency in Frontier AI Act are creating new expectations for model assurance, transparency, and safety.

Our forecast provides the numbers. This moment provides the urgency.

Next Steps For Clients

Clients can access the report here and register for our webinar on the government tech spending outlook.

Clients can also contact us for guidance on how to adapt their technology strategy, strengthen AI governance, prioritize modernization investments, or align vendor capabilities to emerging government requirements.



Source link

Tags: Changeentersgovernmentmarketphasetech
ShareTweetShare
Previous Post

Make Every Tech Dollar Count

Next Post

First Look: Capital One Landing at LGA

Related Posts

US Dollar Index: Why Sustainability Above 97 Remains Unclear

US Dollar Index: Why Sustainability Above 97 Remains Unclear

by FeeOnlyNews.com
February 16, 2026
0

The Dollar Index is trapped between cooling inflation and political uncertainty. Markets are balancing rate-cut expectations against a shifting Fed...

SPIFF Payroll: How Manufacturers Automate Incentive Payments and Motivate Channel Sales – Blog & Tips

SPIFF Payroll: How Manufacturers Automate Incentive Payments and Motivate Channel Sales – Blog & Tips

by FeeOnlyNews.com
February 16, 2026
0

Computer Market Research (CMR): The Ultimate Channel Management Compendium PART 1 Table of Contents for Part 1 Introduction to Channel...

US Dollar Index Poised at a Pivotal Juncture Before FOMC Minutes

US Dollar Index Poised at a Pivotal Juncture Before FOMC Minutes

by FeeOnlyNews.com
February 16, 2026
0

The US Dollar Index (DXY) has entered a high-stakes consolidation phase as markets brace for the release of the on...

What CIOs Are Doing To Evolve Operating Models And Talent

What CIOs Are Doing To Evolve Operating Models And Talent

by FeeOnlyNews.com
February 15, 2026
0

What CIOs are working on, Part 3 of 4 In previous posts in this series, I covered core modernization and...

1 Stock to Buy, 1 Stock to Sell This Week: Analog Devices, Walmart

1 Stock to Buy, 1 Stock to Sell This Week: Analog Devices, Walmart

by FeeOnlyNews.com
February 15, 2026
0

Fed FOMC minutes, Walmart earnings will be in focus in the shortened trading week ahead. Analog Devices heads into earnings...

Hello Again! Bhusri Is Back Behind The Workday Wheel

Hello Again! Bhusri Is Back Behind The Workday Wheel

by FeeOnlyNews.com
February 13, 2026
0

What We Know Workday just announced its new CEO, and, well, he isn’t really new at all. Aneel Bhusri is returning...

Next Post
Zebra Technologies (ZBRA) Q4 FY25 adj. earnings beat estimates; sales up 11%

Zebra Technologies (ZBRA) Q4 FY25 adj. earnings beat estimates; sales up 11%

US import block on vapes could cut illegal sales by a third, BAT says

US import block on vapes could cut illegal sales by a third, BAT says

  • Trending
  • Comments
  • Latest
Super Bowl ads go for silliness, tears and nostalgia as Americans reel from ‘collective trauma’ of recent upheaval — ‘Everybody is stressed out’

Super Bowl ads go for silliness, tears and nostalgia as Americans reel from ‘collective trauma’ of recent upheaval — ‘Everybody is stressed out’

February 8, 2026
York IE Adds OpenView Veteran Tom Holahan as General Partner for New Early Growth Fund

York IE Adds OpenView Veteran Tom Holahan as General Partner for New Early Growth Fund

February 11, 2026
The Weekly Notable Startup Funding Report: 2/9/26 – AlleyWatch

The Weekly Notable Startup Funding Report: 2/9/26 – AlleyWatch

February 9, 2026
Self-driving startup Waabi raises up to  billion, partners with Uber to deploy 25,000 robotaxis

Self-driving startup Waabi raises up to $1 billion, partners with Uber to deploy 25,000 robotaxis

January 28, 2026
Student Beans made him a millionaire, a heart condition made this millennial founder rethink life

Student Beans made him a millionaire, a heart condition made this millennial founder rethink life

December 11, 2025
Huntington Bank gives Ameriprise institutional unit B boost

Huntington Bank gives Ameriprise institutional unit $28B boost

February 6, 2026
Cognizant scales agentic AI operations through Google Cloud alliance

Cognizant scales agentic AI operations through Google Cloud alliance

0
6 Medicare Coverage Gaps That Still Cost Seniors in 2026

6 Medicare Coverage Gaps That Still Cost Seniors in 2026

0
TradeXchange Review – Is This Service Worth Using?

TradeXchange Review – Is This Service Worth Using?

0
First Look: Capital One Landing at LGA

First Look: Capital One Landing at LGA

0
Howmet Aerospace: High-Quality Growth – AlphaStreet News

Howmet Aerospace: High-Quality Growth – AlphaStreet News

0
Infosys-Anthropic tie-up signals AI growth opportunities, not market disruption: Sumit Pokharna

Infosys-Anthropic tie-up signals AI growth opportunities, not market disruption: Sumit Pokharna

0
Cognizant scales agentic AI operations through Google Cloud alliance

Cognizant scales agentic AI operations through Google Cloud alliance

February 17, 2026
Infosys-Anthropic tie-up signals AI growth opportunities, not market disruption: Sumit Pokharna

Infosys-Anthropic tie-up signals AI growth opportunities, not market disruption: Sumit Pokharna

February 17, 2026
ACI Connetic Accelerates Global Adoption as UK Banks Can Now Unite SWIFT, CHAPS and Faster Payments on One Cloud-Native Platform

ACI Connetic Accelerates Global Adoption as UK Banks Can Now Unite SWIFT, CHAPS and Faster Payments on One Cloud-Native Platform

February 17, 2026
Crypto Funds Bleed 3M As Outflows Extend To Fourth Week

Crypto Funds Bleed $173M As Outflows Extend To Fourth Week

February 17, 2026
AI could spark a new age of learning—but only if governments, tech firms and educators work together

AI could spark a new age of learning—but only if governments, tech firms and educators work together

February 17, 2026
700 CyberArk employees to lose jobs after b exit

700 CyberArk employees to lose jobs after $25b exit

February 17, 2026
FeeOnlyNews.com

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Economy
  • Financial Planning
  • Investing
  • Market Analysis
  • Markets
  • Money
  • Personal Finance
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Cognizant scales agentic AI operations through Google Cloud alliance
  • Infosys-Anthropic tie-up signals AI growth opportunities, not market disruption: Sumit Pokharna
  • ACI Connetic Accelerates Global Adoption as UK Banks Can Now Unite SWIFT, CHAPS and Faster Payments on One Cloud-Native Platform
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclaimers
  • About Us
  • Contact Us

Copyright © 2022-2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Sign In with Facebook
Sign In with Google
Sign In with Linked In
OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading

Copyright © 2022-2024 All Rights Reserved
See articles for original source and related links to external sites.