Cloud Investment in the Army’s FY 2025 O&M Budget Request

The Army’s Operations and Maintenance (O&M) budget request for FY 2025 includes some insight into planned investments in cloud computing. Today’s post summarizes those and offers some data points for consideration.

Enterprise Software Licenses

Enterprise licenses support the Army’s use of cloud-based capabilities. The numbers listed here also include funding transfers from the Regular Army’s O&M account, the Army Reserve’s O&M account, and the Army National Guard’s O&M account. The Army centralized these enterprise licenses under Regular Army O&M for this fiscal year.

Growth in the Army’s investment in Microsoft licenses is very strong. This is indicative of the increasing use of Microsoft Azure and Office software licenses for Army365, which is the Army’s instance of Microsoft365. The budget for unclassified licenses is expected to grow by $109M. For classified licenses it will grow from $0 to $55M.

Part of the total related to Microsoft involves a transfer of $148M from Defense-Wide O&M to the Army’s O&M account to upgrade existing Microsoft365 licenses from the E3 to the E5 version to meet DOD zero trust security requirements. The shift to zero trust is thus driving IT investments beyond purely cybersecurity capabilities.

The addition of $76M for ServiceNow licenses is also notable as ServiceNow had become part of the Army’s enterprise IT service management approach.

Additional O&M Observations

The Army Intelligence-Related IT Systems and Networks budget line requested an additional $27.7M to modernize advanced analytic capabilities using an Intelligence Cloud-based environment to support tactical end-users and warfighters. The FY 2025 O&M budget baseline, including the increased funding for the Army Intelligence-Related IT Systems and Networks budget line, is $2.3B.

The Enterprise Cloud Management Agency (ECMA) will see a reduction of $48.3M in it’s O&M funding for enterprise application modernization and migration in order to realign resources that support network management centralization. The ECMA’s Enterprise Cloud Services baseline budget will still be $181.9M after the budget, but as a result of the decrease the ECMA anticipates migrating 370 applications to commercial cloud hosts. This is down from the 454 applications migrated in FY 2024. The ECMA will also provide 36 shared services as part of its Enterprise Cloud Services offerings, the same number it provided in FY 2024.

A reduction of $15.9M in funding for the Global Combat Support System – Army (GCSS-Army) is pending due to the migration of data storage from an on-premise source to a commercial cloud environment. FY 2025 baseline O&M funding for this effort after the anticipated migration cost savings is $36.1M.

Final Thoughts

The Army is reaping some cost savings from its ongoing cloud adoption, but much more work needs to be done. Migrating hundreds of applications remains on deck, for example, as part of the Army’s overall IT modernization efforts. The ECMA is also continuing to rollout enterprise capabilities related to Army365 and IT service management. Further invstigation of the FY 2025 request will likely reveal even more investments under the Research, Development, Test, and Evaluation (RDTE) and Procurement requests so stay tuned.