IDC: Market analysts might have overestimated IPv6 spending

The mandated transition to IP Version 6 will bring money to the information technology community, but venders' forecasts may overestimate actually how much money, a new report found.

Shawn McCarthy, research director for government vendor programs at Government Insights, an IDC company, writes that only fractions of a percent of federal IT spending will go toward IPv6. Nevertheless, the transition will slightly boost in a few areas of government IT spending, but agencies will spend the most for help in network planning and broad configuration management.

'Beware of unrealistic spending numbers,' McCarthy writes in the report, 'The Real IPv6 Opportunity: Understanding the Strengths and Limits of the Federal 2008 Deadline.' The report came out earlier this month.

The largest percent of dollars will go toward IT services, according to figures from the report. In 2010, civilian agencies will spend .22 percent of federal IT budget on getting services from vendors, compared to .03 percent and .04 percent on hardware and software, respectively. DOD's federal spending in 2010 will reach .34 percent on services, with .08 percent on both hardware and software, the report states.

Government Insights forecasts civilian agencies' spending for hardware, software and IT services to reach $32.27 million in 2010, up from $19.47 million in 2007, according to the report. The Defense Department may spend $61.43 million in 2010 on the transition, up from $36.12 million next year.

Government executives said by fiscal 2011 defense and civilian agencies will spend $93 billion on IPv6-related IT purchases, according to the Juniper Networks survey issued in November. This fiscal year, agencies will spend $76 billion.

McCarthy writes that inflated spending estimates include existing markets recast as new spending. 'Many of these analysts are simply looking at all IT spending that may include an IPv6 element'.But this is a very sloppy way to judge the market,' he writes.

Agencies may find some servers and routers do not work with IPv6 or a dual stack with IPv4, increasing short-term spending on upgrade orders, the Government Insights report predicts. McCarthy recommends IPv6 as an opportunity for business growth but warns against betting too much on targeting new IPv6 spending. That spending is tightly integrated within existing IT spending patterns, he writes

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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