Civilian Agency Cloud Computing in the FY 2025 IT Budget

Time was a few years back that federal civilian agencies used to report cloud investments to the Office of Management and Budget (OMB) for the president’s annual budget request. The OMB eventually realized that the data agencies were submitting was not very accurate, so it brought the practice to an end. For the last several years, therefore, industry hasn’t had a way to know what civilian agencies were planning to spend on cloud services and capabilities.

Now, however, because cloud computing use has become so ubiquitous on the federal level, information about solutions being used is beginning to creep back into the annual information technology budget request. This data, while not granular enough in most cases to provide a detailed and comprehensive summary of planned cloud spending does provide insight into the programs which use cloud technology.

Today’s post provides data from the FY 2025 federal IT budget request showing what the budgets are for programs that are leveraging cloud in one way or another. The budgets provided are for civilian agencies only. The Department of Defense (DOD) provides its own estimated cloud budget, so that data has not been included.

Total Program Budgets, FY 2020-2025

Here is the data for total program budgets. The data OMB published in March 2024 stretches back to FY 2020.

As we can see, growth in the budgets of programs leveraging cloud technology began to grow in FY 2022. It then rose gradually in the following year before exploding higher in FY 2024. The growth that year can be attributed to one factor – the Department of the Treasury.

Top Ten Civilian Agencies by Cloud-Related Program Budgets, FY 2023-2025

When it comes to ranking cloud-related program budgets by agency, we can see that the Treasury leads the pack by a wide margin.

Treasury’s leadership in using cloud technology is a bit misleading because the budgets of HHS, DHS, and SSA were all larger in FY 2023. Treasury’s leap to the front came in the request for this fiscal year ($2.1B) as it finally ramped up its Treasury Cloud effort. That growth continues in the FY 2025 budget, with the Treasury requesting $2.4B.

Top Ten Civilian Agencies by Cloud-Related Program Budgets, FY 2025 Only

Narrowing down budgets to the FY 2025 request only yields the following.

The ranking of the agencies does not change compared to the FY 2023-2025 data, but it does at least show how the Treasury is pushing harder than any other civilian agency to adopt cloud technology. This makes sense as it took the Treasury several years to develop its cloud strategy. Meanwhile, agencies such as USDA, DHS, and SSA have been extensively leveraging cloud technology for several years already. Their cloud-related program budgets are also growing, but at a more measured rate consistent with maturity in the use of the technology.

Final Thoughts

The DOD’s estimated cloud budget for FY 2025 is $2.4B, which is significantly less than the $8.9B in cloud-related program budgets uncovered for the civilian sector. Taken as a whole, therefore, civilian agencies remain in the lead as far as cloud adoption is concerned. This balance is shifting as the DOD’s spending on cloud grows more every year, but the business opportunity in the civilian sector – based on the budget data alone – remains larger.