Last week’s article presented the data reported on information technology (IT) spending by the U.S. Army from fiscal 2023 to 2025. This week presents the same set of data for the Defense Agencies, known collectively as the Department of Defense/War’s (DOD/W) Fourth Estate. It shows that much like the Army, the Defense Agencies actually spent more on IT in FY 2025 than they did in FY 2024, demonstrating that in this case as well the contract review activities of the Department of Governmental Efficiency (DOGE) had little to no discernable impact.

Total Fourth Estate IT Spending

This data shows a compilation of spending reported under Product Service Codes classified as IT, and in FY 2025 the Defense Agencies obligated $14.0B for IT goods and services.

Taken as a whole, Defense Agency IT spending may have risen only $100M from FY 2024 to 2025, but over the period from FY 2023 to 2025 it rose $1.1B.

Spending by Top Defense Agencies

The reported data shows the following twenty Defense Agencies ranked from the most IT spending to the least from FY 2023-2025.

Eleven of the twenty organizations shown increased their IT spending over this three-year span, with the Defense Information Systems Agency (DISA) consistently remaining at the top. This comes as no surprise as DISA has for several years now been the primary provider of commodity IT capabilities to Fourth Estate agencies. This includes providing cloud hosting/computing resources and network services.

Defense Agency IT Spending by Business Size

Like the Army, Defense Agencies made solid progress spending more dollars annually with small businesses. On average, this spending rose between $100M and $200M per year, amounting to a 7.0% increase.

Spending with firms that are Other than Small reached a high of $9.2B in FY 2024. It then remained the same in FY 2025. The three agencies that played the biggest role in reducing their IT spending were the Washington Headquarters Service, which spent $397M less in FY 2025 than FY 2024, U.S. Special Operations Command, which dropped its IT spending by $531M over that period, and the DOD Education Agency, which reduced its IT spending by $31M.

Top Companies by Fourth Estate IT Spending

Turning to the companies earning the most, systems integrators own this space. Even the big commodity cloud providers don’t appear in the top twenty.

Only one value added reseller, that being Carahsoft, cracked the list. SpaceX is also not an integrator, but provides advanced technology for launch systems, etc.

Summing up, the DOGE’s activities at the DOD appear to have had little to no impact on IT spending by Fourth Estate agencies in FY 2025. A few contracts were canceled here and there, hurting the firms that held them, but the market remained strong in general.