Pressure to modernize IT infrastructure, driven by the President’s Management Agenda, is mounting across the federal government, prompting agencies to adopt commercial cloud solutions. Policy pressure from the White House and from Congress to leverage modern, cloud-based commercial capabilities and divest expensive legacy IT infrastructure is growing government-wide. The benefits of cloud computing – cost savings, improved cybersecurity postures, enhanced mission efficiency and operational effectiveness, and improved citizen service delivery – make its implementation a critical element of the federal IT modernization strategy.
Modest IT budgets in the Civilian sector are helping to drive cloud investment as agencies face high costs of maintaining and replacing expensive legacy infrastructure. Given the currently stronger fiscal condition of the DOD, Defense Agencies and military departments are investing in cloud to improve cybersecurity and leverage emerging technologies like artificial intelligence and machine learning on cloud platforms. The convergence of alternative funding models, best practices and implementation guidance sets the groundwork for increasing the pace of cloud computing adoption.
Deltek forecasts that agency demand for vendor-furnished cloud computing goods and services will grow from $4.6 billion in FY 2018 to $6.9 billion in FY 2023 at a Compound Annual Growth Rate (CAGR) of 8.3%.
Key Findings
Agencies’ contract obligations reflect stabilization in agency IT investment plans after the change of presidential administration. Agencies reported spending $2.2B on cloud in FY 2017, a rise from the $1.6B reported in FY 2016.
FedRAMP certification is now a must-have requirement for competing in the federal cloud market. Agencies are requiring FedRAMP “High” certification more often as a way of mitigating risk.
GSA’s category management initiative is consolidating methods of cloud procurement, making it increasingly important that providers hold positions on or have teaming arrangements for Best-in-Class (BIC) contract vehicles.
DOD is increasingly using Other Transaction Authority (OTA) to define and procure cloud solutions as prototype efforts.
GSA Schedule 70 (a Best-in-Class contract) continues to be the federal government’s preferred vehicle for buying cloud goods and services.
Spending on Infrastructure-as-a-Service continues to dominate the market across both Civilian agencies and DOD. Spending on Software-as-a-Service comes in second with Platform-as-a-Service spending remaining low by comparison.
Critical Insight for Vendors
Deltek’s Federal Priorities Spotlight: Cloud Computing report takes a strategic 5-year view of the market factors shaping federal procurement of commercial cloud computing services.
The report provides:
Insight into the factors, policies, and strategies shaping the cloud market.
Analysis of the dynamics shaping agency spending on cloud computing.
Identification of opportunities for cloud business development.
Spending profiles and forecasts for the top 18 agencies using cloud computing solutions.
Recommendations to help contractors evaluate the impact of trends on their business.
Deltek's Federal Priorities Spotlight: Cloud Computing report is delivered in PowerPoint® format, including a PowerPoint® Executive Summary, and an Excel® data workbook.