The government market has acted at times like the rising tide that lifts all boats. Demand, particularly toward the end of a fiscal year, traditionally buoys technology suppliers. But fiscal 2005 has unfolded somewhat differently. The demand for products and services has been uneven. Some companies report soaring revenue and profits, while others grapple with mediocre, or even declining, sales.

This year's installment of the 10 companies to watch features products and services vendors that have targeted hot niches and have been rewarded accordingly. Storage, security, and enterprise architecture rank among the areas ringing up government sales. BakBone Software, Tumbleweed Communications and Troux Technologies made this year's list as representatives of this trend. Among services companies, SI International has distinguished itself by being nimble and focusing on mission-critical outsourcing and other areas.

Another shift reflected in the 2005 list: Fewer new companies are entering the government market. The stabilization of homeland security spending and the maturation of once leading-edge technologies — for example, Web services — have combined to reduce the flow of entrants.

New companies may be fewer, but some familiar names have recast themselves in the government sector. They include Adobe Systems and RSA Security, both of which made this year's list on the strength of significantly broadened technology charters.

Read on for the stories of 10 companies that have targeted pockets of demand in the government market.

Hot spots

In recent years, security and storage have stood among the most consistently active markets in the government space. Accordingly, four out of the 10 companies on the list work in those areas.

RSA, perhaps best known in the public sector for digital security tokens, now presents a new face to government customers. The company's product offerings now also encompass identity management.

"We've added more emphasis on the federal marketplace not only in terms of scaling up some of our marketing and sales investment, but also in terms of the broader suite of identity and access management solutions that we are providing here," said Shannon Kellogg, RSA's director of government and industry affairs.