Gartner's Take on the Changing Federal Market

Katell Thielemann, a Research Director at Gartner, wowed the crowd at the GAIN 2016 conference with the morning keynote entitled, “New U.S. Federal Market Battleground Calls for New Tactics.” Her presentation focused on two distinct areas: What is happening in the federal market, and what does GovMarketing 2.0 look like.

She started by explaining what most government marketers have as a starting point: a logo, a brand centered around acronyms, brochures, a website that is focused on the “About Us,” and possibly webinars and events. Unfortunately, there’s nothing here to differentiate a company or move the needle on the buying process.

To add to this, federal IT has changed a lot – from the giant programs managed by a handful of systems integrators to a much more nimble and agile environment. Katell described the change in this way:

  • Government IT started with the Big Bang characterized by large-scale transformational waterfall purpose-built hardware. By 2020, this should be about 15% of government projects
  • Slowly, the government has evolved to the World of Projects: This phase is characterized by increased agility, and access to more vendors (By 2020, 65% of total projects)
  • Federal DigiFlip: This emerging phase creates an environment where the focus is on modularity, XaaS, DevOps, Open Source, Automation, Self-service, Software (By 2020, 20% of total projects)

In addition, new government policies are also adding to the complexity of the federal marketplace, including:

  • OMB memo M-16-12 directs agencies to implement software asset management, promote best-in-class software agreements and reduce software redundancy
  • Federal open-source policy that mandates that any software developed for the government can be shared with other agency
  • The DHS continuous diagnostics and mitigation policy will aggregate data on what software resides on each device (among other things) – and work to improve cybersecurity
  • Finally, the MEGABYTE Act reinforces some of the OMB initiatives and requires agencies to create a software inventory, and provides recommendations on license management

Other technology trends such as the rise of cloud computing and automation are also changing the federal IT landscape. Katell specifically called out the following trends that are impacting government and the vendors that serve them:

  • Automation reduces need for “butts in seats”
  • Cloud threatens on-premises infrastructure
  • New software increases need for upskilling
  • Open source provides opportunities for new entrants
  • New mandates allowing for code reuse brings code management to the forefront

In this changing environment, what does GovMarketing 2.0 look like?

The first thing to realize: It’s really not about you. According to Gartner, 68% of the buying process involves research and interactions independent from the providers being considered…but you need to drive the process.

Policy, Appropriation and Acquisition take center stage

Marketers need to understand the following six areas in order to put together a marketing plan for their organizations:

  • Policy and legislation. (See above for a list of policies that Katell mentioned)
  • Appropriation and budgets: How are agencies dealing with reduced budgets?
  • Agency needs and strategies: What are the agency’s stated priorities?
  • Agency tech adoption patterns: Which agencies are going all in with agile, for example?
  • Acquisition strategies: Gartner research indicates that the buying cycle is increasingly fluid. There are multiple on and off ramps in the process, and abandonment can happen at any time.
  • Vendor implications: How is your company poised to meet the changing federal landscape?

Market Segmentation is Evolving

Katell also recommends that government marketing organizations evolve their market segmentation strategy. The old-school way of doing this is to prioritize agencies based on the agency’s budget. Now organizations are considering ranking their agency targets based on mission type (e.g. healthcare or public safety), by IT orientation or enterprise personality (e.g. Gartner identifies seven enterprise personalities such as judicious, opportunistic or front-runner). By focusing on these personalities or buying patterns, vendors can find agencies that are closely aligned with their offering.

Messaging differentiation is critical

Katell recommends that companies test their messaging for true differentiation. Can you replace your company name with your competitor’s name in your company description? If so, then your messaging could use some work.

Once a company has identified their key differentiators, they then need to make sure their message is credible. For instance companies that say “we do agile at scale, but we have 30 employees” – might not pass the credibility test.

Not all marketing tactics are created equal

Trust and credibility can be enhanced with marketing tactics but some tactics are more credible than others. Top-tier trust building activities might include: live demos, rapid prototypes, case studies and user meet-ups. The second-tier includes: technical whitepapers, value assessment tools and videos. And finally, the least credible activities include: brochures, webinars or blogs. The tier three tactics may catch attention but don’t translate into a buying orientation.

Katell provided a lot of great insight for government marketers that can help us better strategize our plans for 2017. By truly understanding the inner workings of government agencies, new policies and where the future is headed, we can better focus our marketing efforts to ensure we’re moving the needle for our clients.

Stay tuned for more from GAIN 2016. We’re looking forward to getting Day 2 started shortly!

Let’s talk.