Report discovers government agencies prefer private cloud

The U.S. Federal Chief Information Officer Council and the Office of Management and Budget have been insisting that federal agencies move their system and data to the cloud for the past five years. This has lead to additional spending that shows the government is serious about cloud integration.

A report from IDC Government Insights indicated that cloud spending now represents 5 percent of federal agency IT expenditures. Additional findings also suggested that federal cloud costs will be higher than the two agencies, the FCIOC and OMB, originally predicted. Last year, the OMB predicted that federal departments would spend just over $2.2 billion on cloud solutions in 2014. However, that prediction was incorrect and the correct amount appears to be slightly higher than $3.0 billion. Researchers at IDC estimated that the number is still inaccurate and spending could reach as high as $3.4 billion despite the OMB's statement that cloud costs will be less than expected during the 2015 fiscal year.

IDC researchers indicated that Software-as-a-Service offerings and Infrastructure-as-a-Service solutions are the areas that will cost the most. Past estimates from the OBM suggested that the federal agencies would spend $724 million on SaaS and $1.2 billion on IaaS. By the end of the 2014 fiscal year, which ends on September 30, the federal government will have invested a total of $1.3 billion on SaaS, while IaaS will have cost $986 million.

"Clearly cloud growth is ramping up in the U.S. Federal Government," said Shawn McCarthy, research director with IDC Government Insights. "Spending went higher than originally predicted this fiscal year and we expect that the growth will continue into FY2015, even though the Office of Budget Management has indicated that it will cut back slightly on cloud spending. The main reason we believe that growth will continue is that cloud is proving to be a cheaper solution in some cases for government agencies."

Public and private cloud
Enterprise Tech reported that federal expenditures on private cloud services will outpace public could investments in the coming years due to the security requirements of government agencies. The two main guidelines for compliance are the Federal Information Processing Standards and Federal Information Security Management Act. FISMA compliance has been an issue for the Department of Health and Human Services due to the Healthcare.gov hacking that occurred in July, the source reported.

The IDC Government Insights report found that federal private cloud services will cost $2.3 billion in the fiscal year of 2014, and by 2018, the government will invest $5.9 billion if current rates continue. It also discovered that the Social Security Administration has the highest level of cloud integration.

For the public cloud, IDC researchers estimate that spending will be close to $173 million for the 2014 fiscal year and should increase to $3 billion by the end of fiscal year 2017. The report indicated that this lower amount of spending is due in part to the lack of trust when it comes to data management and protection. Additionally, IDC found that the U.S. Department of Defense uses the most public cloud services.

The future of government cloud
The IDC Government Insights researchers suggested that the federal government work with trusted private sector partners to further increase the amount of cloud integration that it is currently seeking. While federal agencies are clearly trying to adopt private cloud solutions, some agencies that require more data management and less protection might benefit from exploring public cloud options. However, researchers believe that the private cloud will continue to be supported more than the public cloud by the various departments.

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