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Wells Fargo Analysis: Government Sector Focuses on Deploying New Tech

Wells Fargo Analysis: Government Sector Focuses on Deploying New Tech - top government contractors - best government contracting event

Wells Fargo Analysis: Government Sector Focuses on Deploying New Tech - top government contractors - best government contracting event

Ed Caso and Justin Donati, chartered financial analysts for Wells Fargo, noticed that government service providers are all about deploying new technology and having the “mission“ knowledge of their clients to bridge Silicon Valley into the end market, Wells Fargo reported on Friday.

The report emphasized that the government sector is focusing its funding on defensive measures such as cybersecurity while the commercial world is embracing “digital“ at a quicker pace. Caso and Donati expect government to shift to digital strategies as digital becomes more prevalent. Government service providers are also focusing less on direct warfighter support, which was the growth market of the last decade.

Well Fargo's report also recognized that Robotics Process Automation is attracting significant investor interest as one of the big three (UiPath) received $568MM in funding to put valuation at $7 billion. Caso and Donati have heard more BPO providers assisting clients deploy RPA over the last quarter. For BPO, Genpact and ExlService have reported a solid first quarter in 2019.

Unfortunately, Cognizant had a tough second half to its first quarter and the company confirmed that U.S. regional banks are stepping up to focus on reducing "run" costs. Client's M&A decision pauses also weighing on IT spend and the focus is turning to an aggressive cost structure reset.

In the week ahead, Presidio will report its third quarter results on Wednesday. Caso and Donati are looking for improvement in services revenue such as hardware or networking. Well Fargo is hosting its “IT Boot Camp“ on May 21st in New York City. You can register for the event here.

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Written by William McCormick

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