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Federal IT Budgets: Looking to the Cloud to Meet Budget Shortfalls
Federal IT spending is expected to drop at an annual rate of 2 percent through 2018. The spending level of about $112.5 billion in 2013 will drop to $102.1 billion in 2018.
ECommerce Times reporter John K. Higgins quoted Kyra Fussell, senior research analyst at Deltek, as saying that “without a doubt, budget pressure has pushed agencies to prioritize spending, to focus on mission-critical investments and keeping the lights on.”
Alex Rossino, principal research analyst at Deltek, said that “funding shortfalls will push out project milestones so that innovations intended to be implemented in the near term will take longer to be completed. Agencies are going to lean on the cloud in a much bigger way than they have been in order to derive the computing power and solution scalability that they require.”
Cloud computing is increasingly being looked at as one technology that may ease the crunch to Federal IT budgets. At the Department of Defense (DoD), for example, Teri Takai, CIO of the DoD, recently published a plan describing how the DoD can both modernize and save dollars by adopting the cloud. Her plan to to standardize IT platforms and consolidate networks into a single enterprise cloud solution. Similarly, Lt. Gen. Ronnie Hawkins Jr., Director of the Defense Information Systems Agency (DISA) is pushing for greater efficiencies and cost savings from technologies like the cloud. By adopting a single email system, virtualizing their environment and moving to the cloud, he hopes to be able to reduce IT costs by 20 percent for the DISA.
Charles Babcock in an InformationWeek piece notes that DISA currently has a $450 million request for proposal for the DoD, and the CIA has a $600 million contract for the delivery of cloud services. Just those two contracts alone would top $1 billion in cloud spending by the government.
Despite the enthusiasm, the move to the federal cloud faces issues with the technology that need to be addressed. These issues include security and availability. Shawn McCarthy, research director at IDC, said that “there are clear indications that fiscal year 2014 will continue to be a flat year for cloud computing investments. Yet beyond that, growth potential looks bright. Investments should reach a critical mass around 2015 and beyond. A new emphasis on cloud solutions is expected to return within the next 18 months.”
