New Report: Deltek Forecasts Federal Cloud Market of $6.9B by FY 2023
Published: October 31, 2018
Federal spending on cloud continues rising.
Deltek’s Federal Market Analysis team just published a new edition of its annual report on the federal cloud market. In its Federal Priorities Spotlight: Cloud Computing report, Deltek notes that verifiable agency spending on cloud computing totaled $2.2B in fiscal 2017, a jump of $600M from the previous year. The rise in spending was expected after a down year in FY 2016 due to the change of presidential administration. Deltek also found that the total value of awarded cloud contracts (TCV) in FY 2017 rose to more than $5B.
IT modernization initiatives coming out of the Office of Management and Budget and General Services Administration are helping drive new agency moves toward cloud adoption. Budgetary tightness at most civilian agencies is also pressing them to take a hard look at commercial cloud solutions. At the Department of Defense, meanwhile, cloud is increasingly viewed as a way of gaining enterprise-level efficiencies, improving cyber posture, and providing an entry-point for emerging technologies like artificial intelligence.
Deltek identified several trends that it believes will have a significant impact on the cloud market in years to come.
- IT Modernization - These initiatives coming out of the Office of Management and Budget and General Services Administration are providing civilian agencies with a new paradigm for adopting cloud solutions. IT leaders across government are watching lighthouse transformation efforts at places like the Department of Agriculture very closely. Should these efforts prove successful, and indications are that they will be, other agencies could replicate them, thereby accelerating enterprise-wide cloud migrations.
- Procurement - New acquisition strategies promoted by the GSA are poised to play an increasingly important role in the market. Category management initiatives are evolving with the goal of shepherding agency IT spending toward a select number of “Best-in-Class” (BIC) contracts that could provide cloud business opportunities to companies holding spots on those vehicles. The recent change of acquisition strategy for the Defense Enterprise Office Solutions (DEOS) effort at DISA to GSA’s Schedule 70 (a BIC contract) for procurement is a case in point. A growing number of agency procurements are heading toward Schedule 70 and some Government-Wide Acquisition Contracts (GWACs) like NASA’s SEWP V and GSA’s Alliant.
- Multi-Cloud Environments - Agencies are developing cloud environments that feature a growing number of providers. Deltek found, for example, that civilian agencies use an average of 49 different commercial partners delivering an assortment of cloud solutions. Diversity in providers is even more the norm across the DOD, which averages 71 industry providers across the military departments and Defense Agencies. The growing complexity of federal cloud environments is prompting agencies to request automated cloud management solutions and specialized contractor support.
Please visit the following link to purchase a copy of Deltek’s Federal Priorities Spotlight: Cloud Computing report or ask your client services representative if your company has access.