The Department of Defense has advised its vendors that its spending on traditional IT goods and services will slow, in favor of additional spending on network-based and embedded IT technologies. The DoD still plans to increase traditional IT spending by about 5.5 percent over the next few years.

The shift in spending priorities could hurt vendors and integrators, because the DoD plans to prohibit the use of lead systems integrators starting in 2010. Companies that offer embedded IT technologies and specialized networking services will benefit, however, thanks to increased defense appropriations for the war.