Government Cloud Spending Ticks Up


The federal government is projected to spend 8.5 percent of its budget on cloud services in 2016, that’s a significant increase from the 5 percent in spent in 2015, and will likely go up even more if President Obama’s budget proposals come to pass.

According to a new report from IDC Government Insights, the uptick in spending is the direct result efforts by the U.S. Federal CIO Council and the Office of Management and Budget (OMB) to get government agencies to move some types of IT systems to the cloud — particularly new systems, stored data, and mobile solutions.

Report data shows that federal cloud spending for FY15 actually came in at more than double what OMB originally predicted when the FY15 budget was originally released. As in the previous two years, OMB has predicted only a slight increase in cloud spending for FY16. The current estimate is just over $6.7 billion for FY16. The increased level of spending on cloud solutions indicates that OMB’s pressure on agencies to move to standardized cloud-based solutions is having a significant long-term effect.

When it comes to spending reports, the federal government has initiated a new category for cloud services simply called “other”, this is the fastest growing category for cloud spending and appears to include things like using APIs and other services that aren’t necessarily applications or infrastructure. The federal government says it spent $4.6 billion on that category in FY15 and will spend about $45.2 million more than this for FY16.

The more traditional categories of Software as a Service (SaaS) and Infrastructure as a Services (IaaS) will see spending of $702.9 million and $1.2 billion in FY2016 respectively.

“We believe that cloud spending will eventually grow to about 50% of all government IT spending, but that number will not be reached until 2018,” Shawn P. McCarthy, Research Director of IDC Government Insights said in a statement on the report.