Cloud efforts to get 25 percent of IT spending

About $20 billion, or 25 percent of expected federal IT spending, will go to cloud computing migrations and related efforts under federal CIO Vivek Kundra’s recently released Federal Cloud Computing Strategy.

Agencies will be required to move three services to the cloud within 18 months, adopt a cloud model wherever feasible and evaluate cloud options before making investments. The program is called "Cloud First." 

An estimated $20 billion of the federal government’s $80 billion in IT spending could be used for cloud computing, Kundra said in the report. The agencies expected to spend the most on cloud technology are the Homeland Security and Treasury departments, at approximately $2.4 billion apiece, followed by the Defense, Veterans Affairs and Transportation departments.

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Funding for the move will be created through data center consolidation. Kundra anticipates a 30 percent reduction in data center infrastructure costs by moving to cloud solutions, with similar efficiencies in software applications and end-user support.

“Cloud computing can allow IT organizations to simplify, as they no longer have to maintain complex, heterogeneous technology environments. Focus will shift from the technology itself to the core competencies and mission of the agency,” he wrote.

Currently, federal agency servers operate at a capacity much lower than private industry worldwide, with 27 percent manufacturing capacity utilization, compared to a 79 percent average across the European Union, France, Germany, the United States, Brazil and Canada, Kundra said in his presentation on the report.

He said the federal government’s IT environment “is characterized by low asset utilization, a fragmented demand for resources, duplicative systems, environments which are dif­ficult to manage, and long procurement lead times. The cloud computing model can significantly help agencies grappling with the need to provide highly reliable, innovative services quickly despite resource constraints.”

The report is an expansion of the administration’s cloud policy in its "25-Point Implementation Plan to Reform Federal IT Management," released in December. In it, Kundra defines cloud computing, outlines a migration framework and strategies, and cites examples and resources.