IDC: Federal Cloud Spending to Rise Again in 2015

Written by CJ Arlotta
July 15, 2013

Federal cloud spending is expected to accelerate after fiscal year 2014, with continued emphasis on investments in private cloud technologies, according to a recent International Data Corporation (IDC) report.

Cloud spending across federal agencies is expected to accelerate after fiscal 2014, according to a recent International Data Corporation (IDC) report.

Spending on cloud adoption across federal agencies has been slow for the past two years, IDC noted in its report, Perspective: Growth and Slight Contraction – Government Cloud Spending by U.S. Federal Agency. Sequestration and a slowdown in system consolidation efforts have dogged government cloud spending in 2013. And IDC Government Insights Research Director Shawn McCarthy said in his prepared statement that cloud computing investments in fiscal year 2014 will remain flat.

“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, and private cloud investments should approach $7.7 billion by fiscal year 2017,” he said.

Infrastructure as a service (IaaS), not software as a service (SaaS), will garner the most cloud computing spending dollars for government, the report stated. IaaS spending will increase from $1 billion in fiscal year 2012 to $5.4 billion by fiscal year 2017.

Public cloud spending is currently only 10 percent of spending for private cloud solutions. Agencies are likely nervous about the level of security provided by public clouds, leading to lower investments there, the report said. Spending on the public cloud is forecast to rise from $110.4 million in 2012 to more than $118.3 million in 2014, with the Treasury Department leading the charge.

Hybrid cloud spending, on the other hand, is expected to remain stable in fiscal years 2014 through 2017. NASA has seen some success in the hybrid cloud space by leveraging a Science Data System for monitoring hazards, IDC noted.

The IDC report follows recent news that Google (GOOG), Microsoft (MSFT), and other giants in the cloud computing space have recently confirmed they’ve complied with requests to provide the National Security Agency (NSA) with information about their users’ online computer use, leading some to accuse the NSA of overstepping its bounds.