Summary: Nation Analytics is providing two new dashboards that provide real-time insight on overall federal software/hardware spending.

• Both screens currently indicate total Q3 2024 federal spending on software/hardware likely increased modestly year-over-year.
• The projections utilize our point-in-time methodology that adjusts for the Defense Department's 90-day disclosure lag by comparing transactions signed in the current period with transactions from the year-ago period that were disclosed as of the same date one year earlier.
• Aggregate Federal Analytics: This screen shows total federal obligations attributable to companies covered on the Nation Analytics Software/Hardware platform and provides aggregate point-in-time comparisons.
• Reseller Tracker: This screen shows total obligations attributable to 26 major federal resellers and provides aggregate and individual point-in-time comparisons.
• The screens are available on the platform under Market Research -> Aggregate Federal Analytics and Market Research -> Reseller Tracker.
• Below we provide details on the new dashboards and sample insights derived from them.

Aggregate Federal Analytics

• With data through 10/22/2024, this screen shows total obligations of $3.42 billion signed in Q3 2024, a 4.6 percent increase vs. the $3.27 billion in Q3 2023 obligations that had been disclosed in government data as of 10/22/2023 (see Figure 1).
• Below the bar chart, the screen provides the point-in-time "Quarter-to-Date" calculation that compares obligations in Q3 2024 with obligations in the year-ago quarter that had been disclosed at the same point in the year in 2023.
• You can use the Supplier menu to create custom groupings of companies. The bar chart and Quarter-to-Date calculation will update based on aggregate obligations attributable to the selected group of companies.
• The screen is limited to publicly traded software/hardware companies (and a few companies that were recently public but have been taken private.) The included companies are listed in the Supplier dropdown menu.
  • The screen is meant to be a broad market gauge. For this reason, we have excluded Palantir and Oracle's Cerner business from the screen to remove the effect of large outlier transactions from the calculations.

Figure 1 - Aggregate Federal Analytics Chart

Reseller Tracker - This dashboard includes total obligations attributable to 26 major federal resellers.

• With data through 10/22/2024, the screen shows $3.16 billion in obligations attributable to these resellers, a 5.8 percent increase vs. the $2.98 billion in comparable obligations for the group in Q3 2023 (meaning transactions that had been disclosed in government data as of 10/22/2023).
• The dashboard includes all federal transactions attributable to the resellers, those categorized under a software/hardware supplier covered on the Nation Analytics platform and transactions that are uncategorized (uncategorized transactions are orders where the government description does not specify a supplier or brand name, such as "Computer workstations" or "Talent and Learning Management System.")
• This more inclusive approach provides a broader gauge of government orders from the group of resellers.
• You can use the Reseller Name menu to view obligations for a single reseller or for a selected group of resellers.
• A second tab called "QTD" shows the point-in-time calculations based on reseller obligations in Q3 2024 vs. Q3 2023 (see Figure 2).

Figure 2 - Reseller QTD Calculations

Sample Insights

• Reseller CDW reported a slowdown in federal orders in Q2 2024 during its 7/31/2024 earnings call.
  • The Reseller Tracker showed CDW's federal obligations were on pace to be weak in Q2 2024 ahead of the company's earnings report. As of 7/25/2024, CDW had federal obligations of $41.2 million in Q2 2024, a 32 percent decline vs. $61 million in comparable transactions in Q2 2023 (meaning obligations disclosed as of 7/25/2023).
  • For Q3 2024, the Reseller Tracker currently shows CDW's federal obligations are up 17.7 percent vs. Q3 2023, based on the point-in-time comparison.

• The data included on the Aggregate Federal Analytics dashboard has proved to be a decent directional indicator of overall federal software/hardware spending the past two years.
  • The table below (Figure 3) shows the Q3 YOY percentage change for the aggregate data set calculated using data through Oct. 22 for each year, alongside the Final YOY Change percentage, which is calculated using complete data that includes Defense Department transactions disclosed after the 90-day lag.

Figure 3 - Aggregate Data 2-Year Predictive History

Please contact Francessca Chiappinelli if you would like to schedule an analyst call.

• A new "Market Research" section includes screens for tracking aggregate federal spending on Software/Hardware and award activity in 10 high-level categories (AI, Business Process Applications, Cloud Infrastructure & Services, Communication & Productivity, Cybersecurity, Data Management & Analytics, Engineering & Developer Tools, Health IT, IT Management, Networking & Hardware).
• The "Categories Overview" tab shows historical spending by quarter (Figure 1). Change the "View By" option to "Aggregate" to see total spending for all Software/Hardware vendors covered in our data set.
  • Use the "Level 1 Category" menu to view a single category.
  • Use the "Supplier" and "Product" filters to remove vendors from our pre-defined categories.
• The "QTD Monitor" tab shows point-in-time YOY comparisons for aggregate federal Software/Hardware spending and awards within each category (Figure 2).
  • The QTD Monitor updates daily and adjusts for the 90-day lag in Defense Department data disclosure by comparing award activity in the current period with awards signed in the year-ago period that had been disclosed as of one year ago. This provides an apples-to-apples comparison and is the best way to gauge federal spending levels in real time.
  • Scroll down to view the "Supplier Level Detail" chart that shows individual contributors to each category.

Figure 1

Figure 2

• Users can now create/edit email alerts by logging in to their account and selecting "Contract Notifications."
• Alerts can be configured to trigger at different value thresholds for different groups of suppliers (see example below).
• Email notifications can be scheduled for daily, weekly, or monthly delivery.
• Users who already receive email alerts DO NOT need to take any action. Notifications have been configured based on current criteria. However, adjustments to notification criteria (adding suppliers, changing value thresholds) can be made by selecting "Contract Notifications" and submitting changes.

• Contracts awarded by the state of Pennsylvania have been added to Software/Hardware