Report: Federal cloud spending to reach $7.7 billion in 2017
While the private sector is often recognized for its ongoing transition to the cloud, a similar movement is happening within public agencies. In fact, federal organizations are beginning to leverage cloud computing for a wider number of purposes, increasing spending projects and changing the way they feel toward the hosted services in general.
For the most part, federal spending on cloud solutions has been somewhat slow for the past several years, though it is expected to increase dramatically after the end of 2014. This was highlighted in a recent IDC study, which found that government agency cloud investments will reach $1.7 billion in 2014 and jump to $7.7 billion by 2017.
Analysts stated that while Software as a Service is currently the primary cloud solution within other industries, Infrastructure as a Service is the leading cloud offering in the public sector. IDC noted that the federal IaaS market will approach $5.4 billion in 2017, compared to SaaS only generating $2.4 billion.
"There are clear indications that fiscal year 2014 will continue to be a flat year for cloud computing investments," said Shawn McCarthy, research director at IDC Government Insights. "Yet beyond that, growth potential looks bright. Investments should reach a critical mass around 2015 and beyond."
IDC reported that decision-makers are also investing more heavily in the private cloud.
Federal privacy is critical
The private cloud is gaining significant momentum throughout multiple industries as executives recognize the importance of having an infrastructure all to their own, not necessarily sharing assets with other organizations or risk having unauthorized individuals inadvertently access sensitive resources. This is especially important in government agencies that have highly confidential information that could introduce significant problems if they were compromised.
"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," McCarthy asserted.
An InformationWeek report highlighted similar findings, noting that the ability to reduce operational expenses is often the biggest driver for the cloud in the public sector, followed by the opportunity to save money on data center investments. This reveals that the ongoing unpredictable economy is having a major impact on federal spending habits and that the cloud can alleviate some of these challenges.
Working with a trusted cloud provider will give federal agencies the opportunity to improve efficiency without jeopardizing the budget.
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