![Page 1: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/1.jpg)
Microsoft Summit
Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008
![Page 2: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/2.jpg)
The Market Today
No surprise: budget fatigue and instability = moderated and “staggered” growth
•FY08 is second consecutive year of “omnibus living”–Spending on services was down 12% during first half of FY07 (vice same period in FY06) –Preliminary data suggests it partially rebounded in Qs 3 & 4
•In FY08, funding determined at end of Q1–How will the market respond?
2
![Page 3: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/3.jpg)
New Definition of Market “Normalization”
•Growth from 9/11 through FY05 was 11% to 23%•Market returned to historic norm (7%) in FY06
–DoD growth = 8% vice 13% from 05-06–Civilian agency growth = 7% up from 2% 05-06
•Pending final data, FY07 market appears to have been flat•Must continue to differentiate between “market growth/potential” and budget growth
3
![Page 4: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/4.jpg)
Professional Services Continue to Drive Market
•Grew nearly 6% again in ’07•After rebounding in key agencies in ’06 (DHS, NASA, DoE) IT flat overall in ‘07•PAMS is nearly 25% of all services procured—up from 18%•PAMS growth evident in DoD (Army: 15%, Navy: 16%) as well as agencies with tough budget challenges (DoT, VA, et al)
4
![Page 5: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/5.jpg)
Professional Services Continue to Drive Market (continued)
Growth strong in other sub-categories: •Program/Project Management•Quality Control/Testing •Utilities/Housekeeping/Facilities (including civilian)•Education/Training•Tech Rep Services
Government workforce/skills gaps are being felt in increasingly diverse fields.
5
![Page 6: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/6.jpg)
2008 Promises More of the Same•Another “omnibus” year means continued constraints; possible program slippage•War costs will continue to divert DoD resources, defer capital and infrastructure investments•BRAC costs and timing in question•Civilian agencies continue to get the brunt – with little relief in sight.•Electoral politics will likely perpetuate funding impasse AND perpetuate focus on contractors
While the market continues to respond to agency needs, peripheral pressures will also continue--and likely grow.
![Page 7: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/7.jpg)
The Market’s Multiple Pressures
Congress, media, public attitudes, agency leadership•Credibility of the procurement process and our industry is low (documented by PSC’s external survey research)•Pressure on industry also high: M&A, “people,” customer anxieties, uncertainties, transaction costs•Myths/perceptions becoming “realities”•National political mood exacerbates the problem
7
![Page 8: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/8.jpg)
Policy Pressures
•A Renewed Focus on Visibility•New Process Requirements•Workforce/Role of Contractors Issues Expand•New Pressures on Profits
8
![Page 9: Microsoft Summit Presentation by Stan Soloway President & CEO Professional Services Council February 8, 2008](https://reader036.vdocument.in/reader036/viewer/2022072017/56649f035503460f94c172dd/html5/thumbnails/9.jpg)
A Renewed Focus on Visibility
•Coburn/Obama “Transparency” legislation•Intensified OCI/PCI attention•Public disclosure of J&As, audits•Greatly increased reporting on role/# of contractors•NDAA
- 40 procurement provisions-new reporting/new visibility/regulations re: contractors
•Small Business legislationEverything will be in the public record and searchable!
9