Cloud Market Update: Software Development Operations
Published: May 26, 2021
Agency spending on cloud-based software development is rising.
- Federal spending on cloud-based Development Operations (DevOps) is rising.
- The top 5 leading agencies by DevOps spending are DHS, Air Force, OSD, HHS, and VA.
- Deltek forecasts that federal spending on Platform-as-a-Service will reach $480M by FY 2023.
Using cloud computing for software development has become an increasingly hot topic over the last couple of years. There are good reasons for this, too. Not only has Congress pushed agency adoption of cloud-based development in the last several National Defense Authorization Acts, it seems like every month there is an announcement about an agency standing up a new environment. Air Force’s Platform One environment, for example, gets a lot of attention because it pioneered the enterprise use of secure development operations at the Department of Defense. Now the other Armed Services have stood up similar environments. The Navy announced its new Black Pearl environment back in January at about the same time that the Army’s Enterprise Cloud Management Agency launched its Coding Resources and Transformation Ecosystems (CReATE) program.
Civilian agencies are also leveraging cloud DevOps. Veterans Affairs and Homeland Security come immediately to mind in this regard, but while we hear a lot about DevOps achieving an understanding of spending in this sub-segment of the cloud market remains elusive. Today’s post provides data which should provide some insight.
Cloud Development Operations Spending
The data below shows federal spending on cloud-based software and system development over the last three fiscal years. These numbers reflect the portion of the market that can be identified, so consider them a baseline. The amount being spent on programs that cannot be tracked is undoubtedly much higher.
Deltek splits spending into software and system development categories to provide detail concerning types of development activity going on. Spending on software refers to the development of a single capability. Spending on system development has software development included in it, but encompasses a wide range of activities. As we can see, spending in both areas has been rising strongly since FY 2018.
Development Operations Spending by Leading Agencies
The data below shows identifiable cloud DevOps spending by the top 15 departments.
The civilian sector is well represented by DHS, HHS, and VA in the top 5. As might be expected, Air Force and the Office of the Secretary of Defense, organizations that use cloud DevOps a lot, round out the top 5. I would expect these departments to remain among the leading agencies to use DevOps for some time to come, thanks both to their size and their approaches to leveraging cloud computing. DHS and VA, for example, have both established enterprise environments that include DevOps. The Air Force and OSD also have established environments in Platform One and milCloud 2.0. Further growth out of Army and Navy is to be expected.
Wrapping up, Deltek does not forecast the DevOps portion of the market specifically, but it does forecast the Platform-as-a-Service (PaaS) spending of which DevOps is part. This year’s forecast will be coming out two months early (in early June to be exact) and it shows that federal PaaS spending in FY 2021 will reach $325M. This total is forecast to rise to $480M in FY 2023 at a Compound Annual Growth Rate (CAGR) of 21.5%. If your company does PaaS work it is a good time to be in the business.