In FY27, state and local governments are navigating a complex technology environment amid changes in policy, the accelerated adoption of emerging tech, and the rapid growth of digital services and citizen expectations. Cloud adoption continues to impact technology consumption; AI is introducing challenges around data, security, governance and contracting; and agencies are facing mounting pressures to modernize aging systems while becoming more efficient and generating measurable long-term ROI.

The Defense Health Agency (DHA) recently hosted the 2026 Defense Health Information Technology Symposium (DHITS) in New Orleans, bringing together more than 2,200 attendees to discuss the future of military health IT.  The clear message throughout the event was that technology, data, and digital capabilities are increasingly viewed as a combat support capability directly tied to warfighter readiness. 

Federal quantum policy is shifting from long-term research planning to implementation and readiness. There have been several recent actions taken, including executive orders, strategy updates and new initiatives, to strengthen U.S. leadership in quantum technologies and post-quantum cyber resilience. Quantum is becoming a priority in federal IT modernization, cybersecurity, procurement and national security. 

Earlier this month, the Trump administration released a new executive order titled “Securing the Nation Against Advanced Cryptographic Attacks,” in efforts to accelerate the shift to post-quantum cryptography (PQC). While the new EO is directed at federal agencies, the downstream effects on SLED will be impactful, particularly through funding alignments, vendor requirements and shared infrastructure.

The Quantum Threat and The Need for Change

Quantum computing is introducing a newer cybersecurity risk with the potential to undermine encryption methods that are currently considered secure, reducing their effectiveness against future threats. For federal agencies and national security systems, this is critical as they rely on cryptography to protect data, identities, software and communications. The risk is not theoretical for planning purposes.

Reshaping Federal Logging Requirements 

As of late May, 2026, logging requirements for federal agencies will shift from a volume-driven mindset to a risk-based logging approach. The previous logging requirements published in 2021 via OMB Memo M-21-31 have been rescinded with the publication of OMB’s latest memo M-26-14, calling the logging of cyber incidents across federal agencies to include both Continuous Event Monitoring (CEM) and Threat Hunting, Investigation, Response and Forensics (THIRF).

On May 7, 2026, the FEMA Review Council released its final report recommending a substantial shift in how disaster preparedness, response and recovery are managed nationwide.

At this year’s Red, White and You conference, our market intelligence team detailed the ins and outs of what we’re seeing across the public sector. Throughout the sessions, one theme became clear: while success in the public sector market used to rely heavily on institutional knowledge and long-standing relationships, agency buying cycles, and slower opportunity development, the market this year looks different. It’s faster, calling for more efficiency, innovation and cost-optimization.

More than 15 years ago, the DoW formally elevated cyber pursuits to the same strategic level as sea, land, air and space. This acknowledgement shifted cybersecurity from risk management to a national defense need, underscoring the importance of protecting the DoW’s defense infrastructure and networks. Defense cybersecurity challenges have since evolved into a multi-domain conflict, particularly with China and Russia - both aiming to infiltrate digital assets.

In early March, the White House released the National Cybersecurity Strategy, outlining a six-pillar framework designed to guide federal cyber policy, investment, and operational priorities over the coming years.