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See who made the latest edition of the GovTech 100 as we analyze the market serving state and local government IT. With ever-more investment in gov tech, several large firms have begun merging with startups and niche players.
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Click here to see the companies on the 2025 GovTech 100.
As Glendale, Ariz., Police Chief Chris Briggs imagines the future of his department, he takes particular pride in the growth of the city’s real-time crime center.
Recently, a brand-new “smart transcription” service from Motorola Solutions brought about the quick capture of a murder suspect thanks to the use of digitally set keywords and camera placements that fixed the location of the incident. Vital seconds were shaved off the arrest, which meant that officers and residents were spared the potential danger of a long chase.
“Being on the leading edge of tech makes sense,” Briggs said, in large part because it results in better “situational awareness” for his officers.
Achieving that, however, is not just about which technology to buy. It’s also about selecting the right supplier. Increasingly it’s about selecting a sole supplier — inking a mostly monogamous business relationship that can keep a public agency tied to a single tech firm.
By most accounts, such relationships are on the rise in the wider world of government technology as money — including fresh capital from private equity — continues to fund mergers and acquisitions in a space viewed as a financial fortress against recession.
Briggs describes his department as a “very Motorola-centric organization.” He likes it that way, he says, because the Chicago-based company has a decadeslong history of supplying police forces, its software beats the competition and working with one company is easier.
“I have one single source to go to if I am not happy about something,” he said. “If I upgrade, I don’t have to worry about upgrading a whole bunch of APIs, and I have no worries about vendors not working together.”
The pragmatism of that outlook seems hard to challenge.
But getting to that point requires sustained work on the part of suppliers and deep, ongoing considerations from the public agency leaders who decide which tools to buy and deploy. It also raises questions about how much room might be left for startup innovation as the big companies in this industry keep getting bigger.
How to handle growing tech suppliers in this era of mergers and acquisitions and easy-flowing capital will bring some hard decisions in the coming years for state and local governments.
THE RISE OF ACQUISITION CENTERS
CentralSquare, OpenGov, Versaterm, Granicus, CivicPlus and Tyler Technologies: Those sellers of government technology have become acquisition centers, bringing in many smaller companies to expand into new verticals, customer segments and geographic regions.
The industry now has about 10 “at-scale platform consolidators,” says Steve Ressler, a longtime gov tech investor who is a managing partner at The Brydon Group, a private equity fund that focuses on small-business acquisitions. Such companies tend to have annual revenue exceeding $100 million and view acquisition as key to their futures.
Those buyouts can come from quarters that on first glance seem strange, yet point to the future of gov tech.
One such example happened in September, when Granicus said it had bought Simpleview, a destination marketing firm. Granicus deals mainly with cloud-based tools designed to increase citizen engagement with governments.
Simpleview’s software for tourism, conventions and related events could give Granicus a way to fill “a part of our experience platform,” CEO Mark Hynes said, by complementing the services they already offer and widening the “digital experience” it can offer its clients in government.
In fact, Jeff Cook, managing director at Shea & Co., an investment bank that has advised in more than 20 gov tech deals, saw the deal as a means to provide what amounts to a wider Granicus umbrella. That could appeal to public agencies that want to do more with as few vendors as possible.
“This acquisition enhances Granicus’ ability to offer a more holistic, data-driven view of communities, helping civic leaders engage stakeholders, attract visitors and drive economic growth in their communities,” he wrote in an analysis for Government Technology.
A MATURING MARKET
Granicus has made at least 14 acquisitions since 2016, with fuel for those moves coming from private equity.
“The market is just maturing, and when you have a more mature market, then capital is coming into it,” said Will Weatherford, a former politician and now management partner at Florida-based private equity firm Weatherford Capital, which has invested in gov tech. “Private equity is there because the opportunity is there. They are not the ones driving the opportunity.”
He estimates that only 20 percent of gov tech products are in the cloud, which means the opportunity is not going away anytime soon, and will help drive further acquisitions, innovation and resulting product integrations.
A fresh example of how those integrations might work comes from OpenGov, in which Weatherford Capital used to own a minority stake that was sold to Cox Enterprises, the telecommunications giant.
Back in 2022, OpenGov itself bought Iowa-based Cartegraph, whose cloud-based software focuses on helping governments, utilities and schools manage assets and maintenance. As a result of that acquisition, OpenGov in late 2024 crafted a pipeline inspection deal with ITpipes, a Washington-based company that sells inspection and asset management software. That partnership brought together offerings from ITpipes with the Cartegraph Asset Management tool from OpenGov.
The ITpipes deal is part of OpenGov’s longer-term vision, according to Ammiel Kamon, chief strategy officer at OpenGov.
“We are building a branded house, not a house of brands,” he said.
That means shifting acquired companies to the OpenGov brand, and making clients feel as though the software they are using, even if it comes from an acquired firm, has been built in-house by OpenGov — one way is via single sign-ons for various tools.
It also means sticking to their lane, so to speak.
As OpenGov grows and buys even more companies, it works to keep its focus on being a single platform for public administration, Kamon said — not, say, something more akin to Tyler Technologies and its broader scope.
“We have a grand vision for the public administration cloud,” he said. “We have really honed in on mission-critical software.”
Unlike some other gov tech firms, OpenGov, in which Cox has majority ownership, has a longer timeline for the company than a private equity operation might, which typically seeks an exit within five years or so.
“Their window for creating value to the customer is measured in decades,” Kamon said about Cox — another possible advantage for a company that grows in the way OpenGov is.
‘EXCITING NEWS’
On the public agency side, the process typically starts with the call from the current account representative who wants a meeting to talk about some “exciting news.”
That’s how Connecticut CIO Mark Raymond described what he has experienced when a gov tech supplier is eager to tout its increased capabilities via acquisition. He has dealt with such situations for years, and perhaps that explains the skepticism he brings to it — a cautious, pragmatic outlook.
Sure, a larger company offering an expanded platform can reduce the number of contracts the public agency needs to maintain.
But the remaining contracts could become “more complex as they now need to handle more data-use scenarios for things like data protection, security and indemnification,” he told Government Technology via email.
It’s not always easier or more efficient to deal with acquisition centers, either. Lock-in becomes a larger concern, with newer, “emerging” tools often finding it more difficult to gain traction.
“It creates inertia that governments must be careful to overcome,” Raymond said.
Besides that, should a single public agency put all their eggs in one basket, as he calls it, it can create “public perceptions about lack of competition. Lots of these technology solutions cannot be changed overnight so that decision to participate in an ecosystem concentrates risk.”
A successful and growing vendor will make sure to get customer management right, he said. That means, in part, using current sales and customer service representatives to help clients understand what’s going on. That also means proper training of those reps post-acquisition so they know the entire new portfolio.
“There is work required before you attempt to ‘leverage the relationship,’” he said.
That includes knowing how individual states do purchasing — one size does not always fit all, even as gov tech suppliers get bigger and broader.
Finally, what he called “bad experiences in one part of the portfolio” can mar positive views of the entire company, especially as such features as cybersecurity, quality control and accessibility become more important.
THE VIEW FROM TYLER
That was a risk recently faced by Tyler Technologies, often considered one of the main acquisition centers in gov tech.
Texas-based Tyler has averaged two acquisitions per year since 1997, with three in 2023 but zero in 2024 as of mid-November, according to CFO Brian Miller. He calls the company’s growth a combination of “organic” innovation and “strategic acquisitions.”
As part of its post-acquisition process, Tyler usually keeps the workers absorbed from the other company. That’s sometimes the main reason for the deal, of course, mirroring trends in other parts of the tech world.
“They can grow beyond what they would in their [previous] company,” Miller said.
Along the way, Tyler has learned other lessons: Don’t grow too quickly via acquisitions, but be deliberate, he said — often via pre-acquisition partnerships with other firms. Buy solid businesses, not what he called “fixer-uppers.” Don’t buy a company with a different work culture; that could include a view about work-life balance that contradicts what Tyler practices, he said.
As well, “services are important,” he said. “We invest a lot in professional services.”
More than 8 of every 10 dollars of the company’s annual sales comes via cloud subscriptions, maintenance charges and other such fees. That’s serious incentive to get services right. And Tyler has done more than 44,000 deployments in 13,000 locations — giving a sense of the scale involved.
But scale and growth can bring their own problems, essentially exposing a company to bad PR or worse should one part of the system break down. Tyler, a publicly traded firm, faced that worry in late 2024 when Bloomberg published a long look at alleged “defects” and frustrations from the rollout of the company’s Odyssey court technology in North Carolina.
Four counties in the state reported nearly 600 defects within the first four months of the tool’s deployment, according to the report. Problems also included “glitches” that resulted in inaccurate speeding tickets, wrongful arrests and other issues, Bloomberg reported.
Miller disputed some of the report, and pointed out that when Kentucky recently decided to spend $38 million on Tyler’s court software, that state mentioned North Carolina as a reason to do so. He also noted that Tyler can boast a 98 percent customer retention rate.
Even so, the incident highlighted one of the risks of all that growth, whether via acquisition, in-house innovation or both. If government officials perceive Tyler as being in over its head, its competitors might look better by comparison, even if changing a large contract isn’t always the easiest thing to do.
“I guess we get more attention than some of our lower-profile competitors,” Miller said. “This is a tough market. Our customers perform essential services with limited resources. You always have to do more with less. Some private equity firms enter this space and they don’t understand how hard it is.”
WHAT’S NEXT?
The third quarter of 2024 brought gov tech deal volumes to $2.4 billion, up from $2.2 billion from the second quarter, according to Cook’s analysis, which also foresaw an “active” market in 2025. Amid that outlook, public-sector tech leaders are gearing up for new advances in AI, cloud services, cybersecurity and other areas.
In Mississippi, for instance, CIO Craig Orgeron is focusing on such issues as emerging technology and automation as well, activities that promise fresh or deeper relationships with growing gov tech suppliers.
As he watches this recent wave of acquisitions and integrations — companies expanding into new verticals and customer segments — he is optimistic about the “enhanced product offerings” but cautious about vendor management, technology alignment and other “complexities.”
“In practice, we must balance taking advantage of these broadened capabilities while ensuring our systems remain stable and interoperable,” he told Government Technology via email.
That means his department must perform more due diligence and balance compatibility and long-term value, he said — and sometimes revise the state’s deployment strategies as vendor portfolios change.
As he sees it, working with a single, well-regarded vendor can bring simpler procurement, contracting and management, assuming service and support remain cohesive.
On the other hand, going with a single large gov tech supplier means placing all of your trust in one place and worrying about what you might miss — another balancing act that more public-sector tech leaders will almost certainly face in the coming years, given the growth in the industry.
“Smaller, specialized companies often offer more cutting-edge or tailored solutions that large vendors may struggle to provide,” Orgeron said. “A hybrid approach often works best, where we leverage the strengths of large providers alongside innovative niche players.”
This story originally appeared in the Winter 2025 issue of Government Technology magazine.
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