FMA First Look: Cloud-Related Programs in the DOD’s FY 2023 Procurement and R&D Budgets

Key Takeaways

• The DOD requested $469M less in FY 2023 for R&D and Procurement programs leveraging cloud technology.
• Requested cloud-related program budgets are rising across all of the DOD except for the Air Force.
• Defense Agencies requested the most funding of all organizations for cloud-related programs.  

Each Spring, Deltek GovWin’s Federal Market Analysis (FMA) team takes a look at the Department of Defense’s Procurement and Research, Development, Test and Evaluation (RDT&E) budget requests for the fiscal year to come. The DOD has only released part of its request so far. This analysis of programs leveraging cloud technology, therefore, is based on a preliminary examination of the data that is currently available. A more thorough study will be completed once the DOD publishes the budget documentation that is currently missing.

FMA identifies technologies by leveraging keyword searches. These technologies include cloud computing, big data analytics, cybersecurity/weaponry, and others. This post focuses only on preliminary findings concerning cloud computing. Future posts will examine other technology areas.

Total RDT&E and Procurement Budgets Requested for Programs Leveraging Cloud

The data reveals a request from DOD organizations for $4.2B on programs that use or prepare for the use of cloud technology in one way or another. This is down $469M from the budgets for those programs enacted in fiscal 2021.

The decline in requested budgets related to DOD cloud use is small so the fluctuation should not be taken as a sign of slowing investment. Changes to one large program can skew the data downward. For example, in the case of FY 2023, the Air Force did not request any RDT&E or Procurement funding for the Ground Based Strategic Deterrent program. In FY 2021, this program received more than $1.3B.

Requested Cloud-Related RDT&E and Procurement Budgets by Organization

Breaking down the data by organization yields closer insight into the level of investment in cloud-related technology.

As we can see, the budgets requested for programs leveraging or investigating cloud computing are rising across the DOD, except for the Air Force, which did not request funding for the one large program mentioned above.

Here are the increases by organization

• Defense Agencies (+$65M)
• Navy (+$154M)
• Army (+$315M)
• Air Force (-$1B)

This growth tracks well with statements made by Defense officials concerning plans to make cloud computing central to DOD’s technology environment in the future. Everyone is likely familiar with the Joint Warfighting Cloud Capability that the DOD will begin implementing this year. Meanwhile, Navy technology leadership has already stated that it will move as many systems to the cloud as possible and Army leaders have voiced the same. Cloud computing soon will be the de facto foundation for how capabilities are delivered.  

Identifying the specific cloud spend in each program is impossible due to the vague way that the DOD reports its data. Readers should keep in mind, therefore, that the numbers presented here are the requested budgets for programs that plan to use cloud technology for a specific purpose (e.g., storage, testing, or delivering a capability, etc.). The numbers presented here should not be considered the DOD’s entire planned cloud budget for FY 2023. They are best thought of as a signpost indicating how and where parts of the department intend to use cloud and the potential amounts they could spend on it.