Three Trends in the Federal Cloud Computing Market
Published: September 02, 2015
The federal cloud computing market is evolving, with developing trends around cloud infrastructures, cloud-enabling services, and data management being three of the most visible.
With the end of the 2015 fiscal year rapidly approaching, it is an appropriate time to summarize a handful of trends that are shaping the evolution in cloud computing in the U.S. federal information technology market. These trends are by no means the only developments taking place. They are simply a few I’ve chosen to focus on. Where it has been possible to do so, I’ve provided data from Deltek’s Cloud Computing Database to illustrate the trend. This database is in the process of being updated for the next installment of our annual report on the federal cloud, big data, and other market.
Trend Number 1 – Growth in the Use of Hybrid Cloud Infrastructures
Experience demonstrated over the first several years of cloud adoption (i.e., from roughly FY 2009-2011) that federal agencies showed a marked preference for using cloud infrastructures they deployed internally. These private agency clouds at places like the U.S. Department of Agriculture and Department of Homeland Security relied heavily on server virtualization to create what agencies called “clouds.” This trend resulted in agencies like the Social Security Administration claiming in its FY 2013 submission to the Office of Management and Budget for the Exhibit 53 report that nearly 100% of its IT spending was on cloud alone.
In FY 2012, this trend began ever so slightly to reverse (see chart below).
Public cloud deployments relying on the use of commercial providers like Amazon, Microsoft, Verizon/Terremark, and others, began to rise, while the number of private cloud projects began to slow. Meanwhile, in FY 2015, a selection of the data available so far shows public vs. private cloud deployments running neck and neck. Could FY 2015 be the year that agencies turn primarily to public versus private clouds?
Time will tell. The important thing to note is that agencies are striving to balance the types of deployments they use, resulting in a higher number of hybrid cloud infrastructures in the market.
Trend Number 1 – Rising Agency Reliance on Contractors for Cloud-Enabling Services
Here at Deltek, we’ve long recognized that the cloud market consists of more than simply one of the three flavors of “as-a-Service” offerings. One of the most important categories of cloud-related services that we measure are those contractors provide to help agencies enable existing capabilities and systems for the cloud. Referring to these as “Cloud Readiness/System Design” efforts, we have seen steady growth in this part of the market, indicating that agencies are moving to the cloud – either an internal deployment or a commercial one – with the work required to enable systems requiring contractor support.
Trend Number 3 – Cloud Security and Data Management
The third and final trend to be considered here is the connection between cloud security and data management. The security trend is ubiquitous in the news, with most of the commentary centered on progress being made to certify commercial providers in the FedRAMP Program. Despite the undeniable importance of FedRAMP, however, a quiet revolution also has been taking place in the way agencies manage data and this bears directly on the security discussion. The revolution is visible in two places – the hiring of Chief Data Officers and in the implementation of enterprise-wide data management policies and guidance.
According to a piece published this summer by Jason Miller of Federal News Radio, at least nine agencies so far have hired Chief Data Officers. Two more, Treasury and NASA, are searching for CDOs.
This trend points to a heightened awareness by agencies that if they are going to migrate data to commercial providers, they need to establish tighter control over how that data is stored, accessed, and used. Placing an administrative official in charge of data management is one piece of the solution. Developing data management guidance is another. Whether or not a CDO has been hired, data management guidance is in development all over the government and, most importantly for industry, it is finding its way into cloud RFPs as security clauses and requirements.