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Big Data Spending Trends: What Agencies are Spending on Services

Published: October 22, 2014

Big DataDEFENSESequestration

Last week’s post took a brief look at federal spending on big data related software solutions. This week’s post turns the focus to federal spending on big data related services over the period from FY 2010 to FY 2014. The data presented is derived from a collection put together by Deltek GovWin’s Federal Industry Analysis team for a forthcoming report on trends in federal cloud computing, big data, data center consolidation, and mobility adoption.

It’s not difficult to determine what federal agencies spend on IT services every fiscal year.  Parsing that data into specific types of services, however, can be tricky, particularly if one is seeking to understand a specific set of services related to an emerging technology trend like big data.  This post features a set of data related to big data services investment in both the civilian and defense sectors of the federal government.  As a reminder from last week’s post, this data collection is based on a set of 69 keywords relevant to big data investments.  These keywords range from the names of specific solutions (e.g., Sqrrl, Splunk, and Hadoop) to types of products and services (e.g., fusion centers, high performance computing, and predictive analytics).  The resulting dataset is discreet, constituting a narrowed-down picture of federal big data investment.  I offer it as a baseline for analyzing and understanding agency investment trends.

Federal Big Data Investment in Services

The chart below shows that federal investment in big data-related services (ex-High Performance Computing) followed a steady uptrend from fiscal 2010 until the end of fiscal 2014.  I assume the trend continued intact through 2014 because the data from 2014 is incomplete due to a 90 day reporting lag from the DoD.  Once that data comes in I fully expect the final total will be higher than 2013 because most federal IT spending takes place in the fourth quarter of each fiscal year.


High performance computing was separated from “other services” to provide an even more specific look at big data services.  The services included in this category include analysis support, data warehouse services, software and hardware maintenance, system development, and research and development, among others.  A separate category for HPC has been included because high performance computing is closely related to big data style computing projects.
An interesting detail shown by this data is that investment in big data related services did not fall in fiscal 2013 as a result of sequestration related cuts.  This is curious because nearly every other area of federal IT spending declined in fiscal 2013 thanks to sequestration.

Spending by Market Sector

When broken out by buyer segment the data below reveals a couple of interesting details.  The set shown includes both “other services” and high performance computing.


First, we see that services spending by civilian agencies flattened in fiscal 2012 and dropped in fiscal 2014 by $150 million.  Civilian agency data is reported quickly at the end of each fiscal year, so the set is more complete.  Second, defense spending continued to increase in fiscal 2014, showing a rise of $115 million even though not all of the data for Q4 has been reported.

Conclusions

Sequestration did not have an impact on big data related services spending at the DoD.  This bodes well for companies hoping to capitalize on rising interest in big data services among defense customers. The impact of budget cuts was, however, felt more acutely at civilian agencies, illustrating that the impact of sequestration can be felt unevenly across government.

The analysis presented here is a small sample of the kind of valuable insight that readers will find in the next version of FIA’s Progress Update report, due to be published on 31 October.