The sequester will hurt tech nationally

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The federal government's automatic budget cuts may accelerate cost savings measures already in place via sharing of services across agencies, information technology (IT) consolidation, and an increasing reliance on off-the-shelf products and cloud-based services, as opposed to customized development. However, there will also be damage to IT spending, and a period of uncertainty as the government reacts to the cuts.

Known as the sequester, the automatic cuts are expected to hit "full force," and that will impact IT spending, said Andrew Bartels, an analyst at Forrester Research. In January, Forrester forecasted a 7.5 percent increase in U.S. tech spending for this year, but that was on the assumption that the sequester would be resolved by Congress. Bartels now expects the federal cuts to reduce the tech spending forecast by about 1 percent. In terms of dollars, in January Forrester put U.S. tech spending in 2013 at $820 billion. Its current estimate for business and government purchases of technology goods and services this year is now at about $808 billion, without telecommunications services, which are just over $1 billion. U.S. government purchases represent between about 8 percent and 10 percent of that spending.


The sequester will hurt tech nationally