Federal Cloud Computing Spending Expected to Reach $3.2B by 2017

In a recent report by Deltek, Inc. about the Federal Cloud Computing Services Market, 2012-2017: “GovWin IQ” claimed that federal government agencies are tapping into the Cloud due to the cost savings cloud computing is offering. These government agencies also recognize that they need to streamline their IT environments as well as sunset their legacy systems so as to improve performance and reduce cost. According to the report, federal spending by the US government will go up to $3.2B in 2017 from $724M in 2012. It is estimated that the compounded annual growth rate is at 34%.

The “cloud readiness” level will greatly influence the way federal agencies will adopt cloud computing. As these agencies move towards infrastructure modernization and datacenter consolidation, the federal government will realize that their resources must be prepared for cloud computing. Deltek studied the present state of potential cloud initiatives, infrastructure consolidation, and the use of contract vehicles in order to take advantage of cloud computing services. The company believes that the preparedness of each federal agency varies although mandates and policies are presently pushing for a wider cloud computing adoption.

Some agencies like the Transportation and Health and Human Services are very prepared for cloud computing primarily because these agencies have made important progress in infrastructure and datacenter consolidation as well as developing strategies for cloud computing. According to Alex Rossino, a Principal Research Analyst at Deltek, Homeland Security, although it had a lot of cloud implementations, is just like the other federal departments. These agencies have to seriously work on legacy IT infrastructure integration.

The Office of Management and Budget, through its twenty five point implementation plan, is pushing intently each government agency for its identification and adoption of cloud computing projects. The policies for the implementation and management of these cloud computing services, however, are outpacing any migration and strategic plans required to reduce risks. Deniece Peterson, Deltek’s Senior Manager, believes that the agencies’ policy pressure and ambitious timelines may be inadequate for such federal departments to create long term and solid strategic plans although the “Cloud First” policy has encouraged such agencies to move to the clouds. Because of this, deployments of private clouds will continue due to the need of such agencies to control the risks brought about by lack of planning.

Security requirements, acquisitions and budgeting, and standards are the significant roadblocks to cloud computing services. The Federal Risk and Authorization Management Program will have to provide a security baseline for cloud computing. The federal agencies, however, must be able to define their won extra requirements. According to Kyra Kozemchak, a Senior Research Analyst at Deltek, the security issues addressed by the Federal Risk and Authorization Management Program will provide the opportunities for cloud adoption.