Agencies Spend Big on Cloud This Year

Federal agencies expect to spend at least $400 million more on cloud computing this year than last. 

The expected bump would bring the year's total cloud computing spending to $2 billion and illustrates the heightened attention the federal government is paying to cloud, according to a recently released report by market research firm Deltek.

However, cloud computing still would only account for 3 percent of agencies’ estimated IT spending, according to the report.

Cloud contract awards have increased of late. In the first quarter of 2014, the total value of these contracts came to $30 million. In the first quarter of 2015, they came to $668 million, according to the study.

The huge growth had a lot to do with the Defense Information Systems Agency’s Enterprise Storage Solutions II contract, which calls for hybrid cloud data storage services, according to the study.

In the first quarter of 2015, the Defense Department awarded the highest value in cloud contracts compared to other agencies, according to the study.

“Ironic, isn’t it, considering the impression in the market that the DOD is dragging its feet when it comes to the cloud?” the authors of the report said. 

As is typical in other types of procurement, the value awarded in cloud contracts is often much greater in the second half of the fiscal year than in the first. For example, in 2013, 96 percent of the year’s contract value was awarded in the last two quarters.

If this were replicated in the second half of 2015, it would mean $668 million is only a tiny fraction of what awarded in cloud contracts the remaining months of fiscal 2015. 

“Spending on these contracts is another story, to be sure, as total awarded value doesn’t promise that agencies are putting budget dollars through these awards,” the report stated. 

(Image via Melpomene/ Shutterstock.com)