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A Decade’s Worth of Knowledge About the Gov Tech Market

The technology market serving state and local government has changed a lot since we first published the GovTech 100 in 2015. Here’s what we’ve learned.

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This is a story about learning.

When we started the GovTech 100 list 10 years ago, the market of state and local government technology was … murky. There weren’t many people who understood it well, and there wasn’t much coverage of the competitive landscape. In fact, so murky was the market that we left the single largest local government purist — Tyler Technologies — off the first list. Oops.

We learned. And we have seen, throughout the years, that our readers and the market at large have learned with us — which has led to substantial progress and a radically different landscape than when we began.

In 2015, there was a small but healthy ecosystem of startups looking to bring new ideas into a gov tech space dominated by large incumbent vendors whose technology formed the bones of public-sector IT infrastructure. These startups had to fight their way in, often with point solutions and pilot projects which required relatively little heavy lifting to set up.

But under the surface, changes were sprouting. One of the most important was a shift toward cloud and software as a service. Cloud talk was ubiquitous in those days, but it always came with a question of how much could be put into the cloud, and how quickly, and whether the government could really hand over its data like that.

The startups — and increasingly the bigger players, too — chipped away at that talk, contract by contract and product by product. Supporting them was FedRAMP, the 2011 federal program to pre-clear cloud products as having met acceptable security standards. This lowered the barrier for many state and local governments to use cloud products, since they largely trusted FedRAMP’s rigor. Later, in 2020, StateRAMP and other programs followed with a more specific sub-federal focus.

Another change was happening: funding. When the GovTech 100 began, the startup market was supported by a handful of angel investors, some bold venture capitalists and strategic corporate investors. But as the younger gov tech companies started to make names for themselves, and the investors in the market started notching some wins — Tyler’s acquisition of Socrata and the merger that created GTY in 2018, for example — others took notice. More venture capital firms began to place bets in the market, along with regional, international and identity-based investors, entrepreneurs jumping into their second companies after an exit — and just a dash of private equity.

That dash turned into a pour, and then a flood. Private equity firms acquired Accela, brought together Granicus and GovDelivery, created CentralSquare, funneled public safety companies into Versaterm and turned OpenGov and CivicPlus into market acquisition destinations.

Public servants appeared to take notice of the market’s increasing financial support, the federal cybersecurity cover and the number of agencies beginning to embrace startups’ technology and began to open themselves up. More and more of them, from big tech centers such as San Jose, Calif., to smaller and mid-sized cities such as Mobile, Ala., began setting up offices and efforts dedicated to innovation, pilot projects and new technology in general. This made it easier for young gov tech companies to earn their first swings in the market, and those valuable government seals in the testimonial sections of their websites.

And then — 2020. COVID-19 was a match lighting the timber laid in preceding years. Governments found themselves in desperate need of digital services and the backend technology to support them, along with extraordinary funding and leadership support.

They got creative and made real progress in record time. Paper gave way to websites, manual turned automated, broadband and network projects accelerated — and most importantly, public servants collectively seemed to turn a warmer face toward modern technology solutions. Many who had never actively engaged in the process suddenly began to participate directly in IT planning and consult their technology leaders more often.

After 10 years, we have a gov tech market with a clear path from concept to exit, willing buyers, willing entrepreneurs and no shortage of ideas. This is an ecosystem of people who want to help government work better.

Here’s to hoping we can all keep learning.

This story originally appeared in the Winter 2025 issue of Government Technology magazine. Click here to view the full digital edition online.

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GovTech 100
Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.