FY14 Budget Highlights Cybersecurity Opportunities within DoD

April 17, 2013 by Leave a comment

photo_Lloyd-McCoy_65x85Lloyd McCoy Jr., Senior Analyst

As you’ve heard from Mohamad’s blog post, the FY14 budget calls for the Department of Defense (DoD) to spend approximately $5 billion for cyberspace operations, up 20% from FY12. In an era of declining budgets and workforce cuts, there is bipartisan support for more cybersecurity spending which is good news for the technology industry.

Since the budget request’s release on April 10, we now know more about the government’s cybersecurity plans in the next fiscal year. The FY14 budget reorganizes some existing Pentagon cyber assets into teams specializing in critical infrastructure protection, cyber defense, and cyber offensive operations. These units, scheduled to become operational this year, will operate under U.S. Cyber Command (USCYBERCOM). The move reflects growing concern about our cyber vulnerabilities and seeks to correct a previously disjointed approach to cybersecurity. Furthermore, increased staffing and support for USCYBERCOM is a major step forward in its path to becoming a Unified Command which would give it greater authority and responsibility. These efforts coincide with Administration efforts to increase the overall size of the cyber workforce. USCYBERCOM has traditionally had the mission of directing cyberspace operations and offering guidance, but is granted no funding authority, and with increases in cyber budgets and more focus being placed on cybersecurity, funding may start to flow through USCYBERCOM within the next year or so.

What does this mean for you? Besides there being more personnel devoted to cybersecurity and a more unified cyber strategy, expect increased spending on tools that detect weaknesses on classified and unclassified networks, and solutions which both defend our critical networks and proactively respond to threats in kind.

In addition to these tools, information sharing is another growth area within the DoD cybersecurity budget. The White House calls for increased funding in establishing an all-inclusive cybersecurity information-sharing system. Some components of this plan include:

  • Manage the Federal Enterprise Network as a single network enterprise with Trusted Internet Connections
  • Deploy an intrusion detection system of sensors across the federal enterprise
  • Pursue deployment of intrusion prevention systems across the federal enterprise
  • Connect current cyber operations centers to enhance situational awareness

We do not expect the cybersecurity budget to drop off in the near future meaning opportunities will abound. Furthermore, due to the embryonic state of DoD’s cyber workforce and infrastructure, DoD officials are looking to industry for ideas and guidance. See this is a chance for industry to help shape future buying decisions. The budget request still needs to get past Congress in order to become law. Neither the House nor Senate, however, has shown an appetite for cutting cybersecurity spending. Therefore, while some details of the President’s request will change you can be sure there will be more opportunities in cybersecurity programs than in previous years.

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President’s FY14 Budget Request Would Add to Deficit but Bolsters Cybersecurity Spending

April 15, 2013 by 1 Comment

photo_Mohamad_65x85by Mohamad Elbarasse, Analyst

In a recent webinar, analysts at Bloomberg Government (BGOV) began what will inevitably be the first of many dissections of President Obama’s FY2014 budget request. The request asks for $3.8 trillion in spending for the next fiscal year. The deficit would be $744 billion next year, with deficits continuing for the next decade.

When compared to the enacted spending amounts from FY2012, many agencies will be seeing a cut in base discretionary spending under Obama’s budget, including USDA, HUD, and Labor. It would initially seem as though the Department of Justice would be facing a whopping 40% decrease in base discretionary spending, but the researchers at BGOV aptly point out the discrepancy is largely due to a change in accounting regarding asset forfeiture and the Crime Victims Fund. Agencies such as Commerce, Energy, VA, and NSF will see increases in their spending requests.

Cybersecurity is one of the few areas enjoying bipartisan support and increased funding in FY2014. The budget outlines $4.7 billion for the Pentagon for cyberspace operations, significantly more than the $3.9 billion it intends to spend on cybersecurity by the end of FY2013. This funding request represents the President’s and the Pentagon’s desire to build out the government’s offensive cyber capabilities. The budget request also asks for $300 million more when compared to the FY2012 number for DHS and a 22% bump for the VA, so the two agencies can further enhance their cybersecurity efforts.

While the federal government is curbing spending, it is no longer treating IT, specifically cybersecurity, as expendable. We can expect another debt ceiling debate this summer and hopefully legislation ending the federal government’s financial gridlock before the August recess.

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Shielding Yourself from Sequestration

March 22, 2013 by Leave a comment

photo_Chris Wiedemann_65X85- one postby Chris Wiedemann, Analyst

If you had a chance to view immixGroup’s Market Intelligence briefing on sequestration yesterday, you hopefully have a better understanding of what the proposed cuts mean to IT companies.  Tim Larkins summarized the history of this situation – what sequestration is, when it became law, and just how those cuts (which weren’t really supposed to happen) actually arrived. He also covered some of the projected long-term impacts of sequestration on federal spending. This information is all vital – it will help you understand your customers’ pain and better equip you to discuss the cuts they’re experiencing.

Today, though, I want to take a minute to reemphasize some of the key components of Tim’s presentation: what does this mean for federal sales? The “snowquester” is actually a pretty good metaphor for the impact of these spending cuts on the federal IT market: some segments will stay pretty dry, while others may well get buried. So what should we be doing to shield ourselves from sequestration?

First and foremost, when you’re finalizing a deal with your customer, make sure the money is there. That means asking your customers two questions: what activity account is funding the purchase, and is the right amount of money in that account? Remember, while program people are creating demand, they have to request that money be transferred from Treasury into the right activity account before they can actually buy anything. This is the step where the sequestration cuts are actually taking place – think of them as a leak in the cash pipe. That leak could mean that money intended to purchase your products is actually getting lost before it ever lands in the right activity account. Don’t forget: unless you and your customer both know 1) which account is funding a purchase, and 2) whether that account contains the right amount of money, you’re subjecting yourself to potential delays and hang-ups down the road. You might even not get paid.

A few more points that I want to emphasize:

  • Although the long-term impacts of these deficit cuts will probably be minimal, we are going to feel the pinch in the short term. Federal IT spending will decrease overall this year, particularly in DOD, where they have been spending as though the sequester would not be implemented.
  • Most of the cuts to IT spending will probably be felt by systems integrators and services contractors, both large and small. All the language coming out of OMB and other government sources indicates that there are many duplicative or otherwise unnecessary IT services contracts that will probably be descoped (or cancelled outright). This is bad news for small business subs on large contracts, but is actually good news for the COTS community, since government will need to buy more tools to perform the tasks that they used to outsource.
  • Keep your audience in mind. At the executive level, demonstrating cost savings and value is going to be more critical than ever – if you can’t demonstrate real ROI within two years of purchase, your customer likely won’t be interested.
  • At the end of the day, there is still a mission that has to be met, and government customers won’t be able to use sequestration as an excuse not to do their jobs. If you or your clients can help them meet that mission, you will still find a willing audience.

As always, if you have more specific questions, I urge you to reach out to the Market Intelligence team. Good luck and happy hunting.

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Reloading Your Federal Marketing Toolbox

March 7, 2013 by 1 Comment

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

My mother likes to complain that my father takes tools from the toolbox and doesn’t replace them, leaving her with a handful of nails and no hammer to drive them. Frustrating, right?

Marketers trying to attract the attention of government buyers face a similar dilemma: tools are getting taken from our tool kits and not replaced. Since my last posting about government event cancellations, we’ve heard of at least two more: the Department of Homeland Security’s 6th Annual Industry Day and DIA’s Defense Intelligence Worldwide will not take place.

Traditional media sources continue to struggle, with editors and reporters being downsized and print magazines continuing to consolidate. The impact of Sequestration cuts on major contractors and systems integrators is unlikely to help this trend as marketing budgets will surely be hit.

Those of us who are active in lead generation (via phone campaigns, email blasts, and events) will surely see conversion rates take a hit as furloughs kick in. What’s the best day or time to call or email someone if they’re not working that day? Will ongoing furloughs, downsizing, and political fights over giving a meager 0.5 percent pay raise break their spirits and drive them out?

Today’s blog post in FedConnects raised a few interesting questions. Among them:

How will government address the need for civil servants and military and intelligence workers to stay abreast of new technologies, innovate and collaborate in order to increase efficiencies and ensure productivity?  As part of President Obama’s Open Government Initiative, we are supposed to be operating under an open government mandate that encourages less siloing, more sharing of services and innovations.

How can true transparency and efficiency be achieved if government is restricting collaboration and opportunities for government leaders and industry to share ideas and work on problems?

If your organization relies on you to create demand in the public sector, it’s time focus on finding new tools to supplement the old ones. Will virtual events play a role as live conferences drop like flies? What role will associations play in educating our customers? How about social media driven information sources like GovLoop and Federal Technology Insider? I think it’s time to work some of these into your public sector marketing budgets, in addition to the targeted, local, and low-key events that were highlighted in Market Connections’ recent study.

Speaking of tools, we have a few that can help you make sense of Sequestration and the ongoing budget mess. Our Sequestration Resource Guide provides our take on how to deal with the pending cuts and also points you to market intelligence resources that can help. In addition, we’ve already had hundreds of IT sales and marketing professionals register for our upcoming webinar on Sequestration and the Federal Budget.

With so many tools vanishing these days, make sure you re-evaluate and take advantage of the ones that are left.

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A Tale of Two Subject Lines

February 13, 2013 by 2 Comments

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

I noticed an interesting juxtaposition of subject lines in my (overflowing) email in-box today.

Early in the day, I saw this message from Defense Systems:

DISA collaboration tool doubling its capacity

The top story was summarized as follows: “The enterprise collaboration tool known as Defense Connect Online is about to double in capacity as users seek less expensive ways to conduct meetings and training in austere budget times, reports DISA.” The piece caught my attention as it signaled recognition of the inevitable: government employees are finding new ways to communicate and collaborate since they can’t travel in person.

Not long after, I received a message with this subject line:

Latest Conference Cancellations & Postponements on GovEvents

 This email from GovEvents.com led with the following summary, which serves as a continuation of my last blog post on a similar topic:

I think GovEvents.com is a great tool that provides a valuable service to the community (if you don’t use it, you should). It just struck me as significant that a company which promotes government events led its outreach effort with a message about…the cancellation of government events!

We all know travel budgets and other restrictions are hammering the marketing media mix. We see today that our DoD customers are doubling their capacity to host their meetings, training sessions, and other communications virtually to cut costs and minimize scrutiny from ethics officials and their superiors.

What does this mean for government marketers? Should we be investing more in online media, virtual events, webinars, and the like? Face to face communication will never be replaced, but what will place a close second?

The more important question is: where are you placing your bets?

We’re continually looking into new avenues to help our manufacturers and channel partners reach their government customers. I’d love to hear from you about how your plans are changing.

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More Cancellations for Government Events

February 6, 2013 by 12 Comments

photo_Allan-Rubin_65x85by Allan Rubin, Vice President, Marketing

My wife may disagree with this, but I take no great joy in saying “I told you so.”

It’s no secret that events targeting government employees have fallen on tough times. We’ve used this space repeatedly to encourage immixGroup clients and channel partners to re-evaluate their event marketing plans. Unfortunately, we’re seeing more and more examples to prove this re-evaluation is necessary.

We learned today that the DoD Cybercrime Conference has been “postponed” with the following message as an explanation:

“Based on DoD’s budgetary uncertainty, The Defense Cyber Crime Center (DC3) has been given direction to reduce the government expenditure rate. Therefore, DC3 and Technology Forums have reluctantly come to the decision that we will not be holding our annual DoD Cyber Crime Conference in 2013. We apologize for any inconvenience this may cause and appreciate everyone’s efforts and support.”

This came on the heels of this message which we received on January 15:

“In response to DoD and DON guidance, the DON IT Conference, West Coast 2013 has been cancelled. The conference was scheduled for Jan. 28-30, 2013, at the San Diego Convention Center.”

In mid-December we received this notification of an event postponement. Is this a precursor to another shutdown?

“As a result of much deliberation, as well as guidance from the Army, AFCEA International has reached the decision to move TechNet Tucson to Augusta/Fort Gordon, GA.  The event will be renamed TechNet Augusta, and take place September 10-12, 2013 at the Marriott at the Convention Center.”

While I can’t yet confirm this, we’ve heard rumors that many of the AFCEA conferences may be cancelled this year. We hope that’s not the case but it’s worth watching.

The drop in demand for government event attendance was clear in the recent data put out by Market Connections. This confirmed what most of us already feared:

“With shrinking budgets and fewer resources to support mission goals, federal government decision makers and influencers plan on attending fewer events this year. According to a recent poll by Market Connections, Inc., a leading government market research firm, 38% of government employees plan to attend fewer educational and trade events in FY2013 compared to FY2012.

The main reasons for the expected decrease in event attendance are budget and travel restrictions (78% and 58%, respectively). Just over one-third (36%) of respondents also report management will not allow them to attend events in FY2013. However, some government workers plan to attend about the same number of events (27%), and a few plan to attend more (5%).”

Market Connections notes a few silver linings in the data (summarized here). Most federal workers still prefer live events to webinars. They still see value in attending events to learn about new technologies in addition to networking. The key is to make sure your events align with the preferences of your target audience:

“Of the 400 government workers we polled, 58% prefer smaller, content-specific events over large trade shows with multiple vendors. Many of the respondents are thinking local, with seven in ten more likely to attend events that are close to home (69%) or hosted by a trade association (72%), as opposed to traveling to events that require a hotel (29%) or are hosted by a corporate entity (25%).”

So when your sales team or corporate office asks you to set up that glitzy product demo at the Ritz to attract 100 federal CIOs, you may have some bubbles to burst.

We’ve been proactive over the past 18 months to re-align our marketing programs to stay in front of these changes. If you’re an immixGroup client, contact your senior account manager or email me at allan_rubin@immixgroup.com to learn more.

UPDATE: As if on cue, I just got this message only a few hours after this blog post went live:

“Due to U.S. Department of Defense evolving budget directives and its current fiscal constraints, DISA has notified AFCEA International that DISA has cancelled its “Expanded Forecast to Industry” conference scheduled for 14-15 August 2013.  Senior DISA leaders are hopeful they will be able to resume the conference with AFCEA in FY14.”

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Air Force IT Conference is Dead

November 12, 2012 by 4 Comments

by Allan Rubin, Vice President, Marketing

R.I.P., AFITC.

As many of you know, the Air Force IT Conference held each August in Montgomery, Alabama was cancelled this past year. It had been held annually since 1983 and was the largest IT conference within the Department of Defense.

Now it looks like it’s not coming back.

According to an announcement on Friday by Montgomery AFCEA President Joe Besselman, “the Air Force has no plans to ever restart an Air Force-led conference like AFITC.” Besselman continued: “…the earliest one could expect a conference similar in nature is 2014. AFCEA International is working with the Air Force to gauge the need, content, and potentially the location.”

This provides further evidence that DoD in particular is looking to consolidate trade shows and conferences to eliminate duplication and save taxpayer money. I’m all for that, but this takes a great marketing vehicle off the table for those looking to pitch their offerings to the Air Force IT community. This show was always a source of qualified leads and great relationship-building opportunities for us.

For those immixGroup clients who need to find a way to stay in front of this community, please contact us and we’ll see what we can do. The Montgomery AFCEA chapter hosts a number of other events, including MITS 2013 in June. There’s a tentative Air Force Industry Day event planned for the same time.

As I said in a previous post, keep your marketing plans and budgets fluid this year to accommodate changes like this. More are coming.

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Army Bans Attendance at Non-DoD Conferences

November 7, 2012 by 4 Comments

by Allan Rubin, Vice President, Marketing

I awoke a bit late this morning after staying up to watch the election returns and speeches. Upon pulling out my phone to scan my inbox, I was stunned to see this headline from Defense Systems:

Army Attendance at Non-DOD Conferences Banned for the Rest of the Year

After the crackdown on internal conferences due to questionable expenditures (think GSA and VA), we knew it was only a matter of time before third-party events would be directly affected.

It turns out Secretary of the Army John McHugh released an October 17 memo titled “Interim Guidance for Implementation of New OSD Conference Policy.” According to the memo, McHugh is “suspending Army attendance at non-DoD conferences between now and 31 December 2012″ unless attendance was previously approved or an exception granted, with exception requests requiring endorsement by commanders of Army Commands, among others. The memo reminded recipients of their obligations to “adhere strictly to all applicable law, regulation, and policy,” and it emphasized the need to “implement more cost-effective and efficient methods to train, plan, collaborate and disseminate information.”

McHugh stated a goal of publishing an updated Army directive during the first quarter of FY13, with an effective date of January 1, 2013, to “develop a more detailed and comprehensive approach” related to Army participation in conferences. The Administrative Assistant to the Secretary of the Army (AASA) will lead and manage Army conference efforts, draft new policies, and develop processes to analyze, track, and report on conference activities.

Considering the importance of face-to-face events in federal marketing activities, particularly as they relate to DoD, it’s disheartening to hear that individuals from Army will not be able to participate. We don’t yet know how this will impact non-DoD events in 2013, but I’d guess participation will continue to suffer. We’ve already heard that DoDIIS 2013 and the AFCEA TechNet events will be undergoing some changes. USSTRATCOM Cyber & Space Symposium, scheduled for next week, has already been cancelled for this year.

We recommend keeping some flexibility in your 2013 event marketing plans and budgets until we see how this plays out. We’ll update you through Government Sales Insider when we learn more.

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Three Reasons to Cut Your Trade Show Marketing Budget

July 31, 2012 by Leave a comment

by Allan Rubin, Vice President, Marketing

For most of my career in B2B/B2G marketing, trade shows have been an integral part of the marketing mix (for lead generation and branding/awareness). This was particularly true in the defense world, where large shows and face-to-face meetings were staples of the annual marketing strategy. Often, your absence from a show would be as notable as your presence, and that alone became a justification for investing marketing resources and budget.

I think it’s safe to say those days are behind us. Recent scandals, budget pressures, and political posturing have taken their toll on everything from attendance to activities at large conferences and shows. While I think these events may still play a role, smart federal marketers need to re-evaluate how much they’re spending and what they’re doing at these events, and they need to reset their expectations accordingly. I see three primary reasons to find other places to put at least some of your federal marketing funds:

  1. Trade Show Attendance is Down – We knew this was likely to happen as travel restrictions kicked in and spending scrutiny increased. AFCEA’s TechNet Land Forces South show, one of three regional shows that spun out of the former LandWarNet event, was held in Tampa last month with roughly 225 government attendees for a three-day show (compared to 600+ exhibit personnel).
  2. Off-the-Floor Events are at Risk – Looking to host a big party or fancy dinner to engage with your prospects? Don’t bother. Camera-shy attendees don’t want to answer questions about why they were partying it up on the taxpayer’s tab. We’ve learned at least one agency has forbidden its employees to attend vendor parties at an upcoming show and is encouraging exhibitors to keep things low-key to avoid negative publicity for the event. I’m sure they are not alone.
  3. Driving Traffic is Getting Tougher – FAR rules already restrict your promotions and giveaways intended to draw people to your booth. But expect attendees to be wary of accepting anything with any perceived value whatsoever. Don’t forget — any negative publicity for a show could lead to cancellation in this hyper-sensitive climate…a fate that has already befallen AFITC and threatened shows like GFIRST 2012. We’ve heard some show organizers may prohibit swag at future federal shows, making it even harder for you to get the attention of a limited number of visitors (although many of us would welcome a reduction in treasure hunters with overflowing goodie bags). Already, organizers at GFIRST have banned catering on the exhibit hall floor, so attendees will have to leave the hall (or hit the concession stands) to get their coffee, smoothie, or popcorn fix.

Our advice: if you need to be at a trade show, scale back your investment and/or put on your negotiating hat. Many exhibitors are pulling out and leaving empty booth spaces on the floor, so you can probably super-size your booth at little to no extra space cost. Don’t forget to remind your sales team to call on prospects in advance to schedule meetings. No matter what the environment is, those who put very little effort into a show usually get very little out of it.

If you’re looking for new ideas on how to re-direct those federal trade show funds, contact your immixGroup account manager or our marketing team to see what we’re cooking up.

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House Committee Approves Bills to Lock in Travel Spending Cuts

June 28, 2012 by Leave a comment

by Allan Rubin, Vice President, Marketing

Yesterday Government Executive reported that the House Oversight and Government Reform Committee approved, and sent to the House, two bills targeting excessive government spending. The actions aim to cut agency travel spending by 30 percent with a particular focus on travel to conferences.

An amendment added more teeth to this request. The amendment would restrict agencies from paying travel expenses for more than 50 employees to attend a single international conference (unless they are approved in advance by the Secretary of State). Further, it requires each agency to post on its public Web site each quarter the details of any travel expenses paid for conferences during the previous quarter.

Personally I think the Secretary of State has more important things to do than sign off on travel requests. But my larger concern is with the increased scrutiny around individual travel details and the chilling impact it will have on demand among prospective attendees of government conferences and events. Since the details emerged from the GSA conference scandal, it seems that any government employee who wants (or needs) to attend an event in another city has to sign away his or her life and risk public humiliation, not to mention career growth, just to get approval.

Is the government over-reacting here? More importantly, will anyone in government have the appetite to go through the approval process (or face the risk) to attend any of the events at which we promote our products and services? Will they be discouraged from attending local events too? Or have those become an even more important tool for marketing professionals?

We’ll be following this bill as it winds its way through the House. And as always, we’re watching our attendance rates to see if our marketing ROI has been (or will be) impacted by these continuing changes. I urge you to do the same.

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