Cloud could squeeze even more savings, says survey

Federal agencies have saved an average of $5.5 billion yearly by implementing cloud computing, a modest number next to the $12 billion in potential savings estimated by new research.

The MeriTalk report “Cloudy with a Chance of Savings” found that government CIOs and IT managers had saved 7 percent of their annual IT budget by going cloud. That number represents $5.5 billion in savings based on the FY2013 IT budget of $78.9 billion.

But according to input by federal IT executives, agencies could have saved even more. Estimates from MeriTalk indicated agencies could have slashed 15 percent of their IT budgets for the last three years with cloud, which could amount to nearly $12 billion per year.

Despite the promise of big savings, agencies are still cautious about migrating to the cloud and using cloud-based services. Eighty-five percent said security remains the largest obstacle to cloud implementation, while 38 percent cited the culture aspect as a roadblock. Nearly one-third said service levels are the most pressing challenges to cloud adoption.. 

Asked where the most resistance to cloud comes from, respondents pointed to IT leadership (20 percent), program management (18 percent) and legal (17 percent).

Defense Department and civilian respondents had opposing views on the direction of the FY2016 IT budget as well as cloud applications. DOD respondents believe the FY2016 IT budget will decline to $72.4 billion, while civilians think the budget will grow to $80.1 billion.

Seventy percent of all respondents expect an increase of cloud-based applications within the next couple of years. However, they ranked data center consolidation as a biggest driver for savings in the federal government. Cloud placed second, followed by big data and the “bring your own device” – BYOD -- concept. 

The findings of the survey, which polled 108 federal CIOs and IT managers, were presented April 25 at MeriTalk’s Cloud Computing Brainstorm event on Capitol Hill.