Charles Lyons-Burt
A confluence of economic uncertainty, global conflicts and a change in presidential administration are making 2025 a year of significant change for government agencies and how they carry out operations. To adapt, agencies will need to rely on a wider range of technology innovations from providers who can ensure their solutions are adequately tested and tailored for hundreds of contracts in cybersecurity, big data, customer experience and more.
For perspective on this, Carahsoft Vice President for Innovative & Intelligence Solutions Michael Shrader recently sat down to discuss his work managing a unit of more than 300 employees. His team supports 250+ technology vendors collectively doing more than $2 billion in business annually with the government.
ExecutiveBiz: In addition to your existing vendor portfolio, your team is responsible for onboarding new vendors at Carahsoft. Can you talk about how you work with the venture capital community and how that has evolved over time?
Michael Shrader: There’s a thirst for more innovation in government, and a larger portion of companies providing it are coming to us from the VC pipeline. Startups and companies driven by VC funding are definitely getting more active in this market, and they’re more active at scale. I think they’re embracing the market more because they see government technology as a stable and growing sector from an investment point of view.
As these new companies come on board, my team spends a lot of time helping them understand government pain points and requirements, as well as how best to partner with public sector entities and remain compliant with agency rules and processes. The onboarding process involves thorough due diligence, and our evaluation goes beyond just the quality of the product. We focus on how well it addresses the critical objectives that government agencies have specified; we assess a company’s relevance to key use cases and determine the best resources to align with each project or agency need.
EBiz: How are current world and economic dynamics affecting the government contracting market?
Shrader: There are two ongoing wars, a growing threat from China, the possibility of a recession, rising inflation and higher interest rates. Throughout, there’s the usual uncertainty surrounding the exact priorities that will arise from a new presidential administration. All of these market factors are having a significant impact on our customers.
But while it’s an environment of complexity and challenge, it’s also one of tremendous opportunity for emerging technology markets. There’s never been more budget available for public-private partnerships devoted to newer areas like generative AI, blockchain or post-quantum computing. The reason is that these technologies are going to be essential for carrying out tomorrow’s government missions.
EBiz: Can you share some domains and sectors where you see the most innovation happening lately?
Shrader: We’re witnessing significant innovation in key areas such as healthcare, vulnerability management and open-source technologies. We’re also seeing more growth in open-source data projects, space technology and AI automation for unmanned aerial vehicles and drones.
Generative AI obviously remains a huge focus area as we see more potential for large language models to improve a wider range of government use cases. For instance, genAI is increasingly wedded with behavioral analytics to detect fraud. Other applications are designed to boost productivity, automate routine administrative tasks or streamline processes like acquisition and contract management.
I would single out cybersecurity as one of the most dramatic areas of innovation. This is particularly true in the wake of new National Institute of Standards and Technology guidance on post-quantum security. In August, NIST released a set of standards for cryptographic algorithms capable of withstanding attacks from powerful quantum computers, and the vendor community is actively innovating solutions to meet this emergent need.
EBiz: How do you see government needs around technology changing with the new presidential administration?
Shrader: There will naturally be a growing appetite for technology to drive the efficiencies that government agencies are seeking. We also expect some new policy priorities. A good example might be the elevation of cryptocurrencies as a driver of innovation around decentralized blockchain technologies.
All the while, the solution cycles are accelerating, so my team’s job is to ensure vendor readiness to meet government needs and timelines. This goes beyond reviewing FedRAMP and other certifications. We ask deeper questions like: Who are the key people involved? How resilient are they? Do they employ agile data management practices and have the capability to support accelerated computing for training and processing? A priority throughout is transforming the government provisioning processes to be more agile and less hindered by complex acquisition hurdles and bureaucratic challenges.
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