FY 2020-2022 Navy Cloud Spending

This week’s post on the U.S. Navy completes a series of posts on cloud computing spending by the three  military departments (MILDEPS). See these linked posts for information on cloud spending at the Air Force and Army.

The earlier posts identified contradictory trends in the direction of cloud spending. The data for the Air Force showed that spending growing very strongly in fiscal 2022. The Army’s data, meanwhile, showed spending going in the opposite direction. Today’s post on the Navy documents a cloud spending trajectory similar to that reported by the Air Force, just not with the same strength.

Several years ago IT leadership boldly declared that the Navy would be leveraging cloud services to the farthest extent possible. The pivot in this new policy direction started off slowly, but in Fiscal Year (FY) 2022 it appears to have picked up pace. To illustrate the point, here is the data for Navy’s total identifiable spending on cloud from FY 2020 onward.

Total Navy Cloud Spending, FY 2020-2022

• FY 2020 – $461M
• FY 2021 – $441M
• FY 2022 – $525.5M

Determining what is driving this growth is slightly problematic because of opacity in the data. To the extent that I’ve been able to identify the Navy’s use of service delivery (i.e., aaS) types, the data shows mixed results.

FY 2020-2022 Navy Cloud Spending by Service Delivery Type 

• Software-as-a-Service (SaaS) – $545M
• Infrastructure-as-a-Service (IaaS) – $369M
• Platform-as-a-Service (PaaS) – $55M

The Navy’s SaaS total is deceptive because in FY 2020 the Navy spent $194M on capabilities delivered via SaaS. By FY 2022 that total had dropped to $189M. This decline represents little more than a rounding error when it comes to federal spending in general. More importantly, it does not help explain where the growth in FY 2022 can be found.

Spending on IaaS provides more of a hint. Reaching $125M in FY 2020, the Navy’s spending on IaaS rose to $146M in FY 2022. Clearly, the Navy began relying more on the computing power and hosting services provided by commercial partners in the last fiscal year.

Growth can be found in the use of PaaS as well. Totaling $13M in FY 2020, this spending more than doubled to $29M in FY 2022. Strength in PaaS spending is undoubtedly related to the Navy adopting a software development approach that is similar to that of the Air Force.

Adding together the growth in IaaS and PaaS spending gives a total of $37M new contract dollars spent by the Navy in FY 2022. This goes most of the way to explaining why Navy’s spending increased in that year vs. FY 2020.

Concluding with the Navy’s spending by cloud deployment model, we find the following:

FY 2020-2022 Navy Cloud Spending by Deployment Model

• Community – $598M
• Unknown – $576M
• Hybrid – $126M
• Public – $126.5M

The inability to identify the deployment model for a large percentage of the Navy’s spending is unfortunate, but that is the nature of the data. The totals for the remaining categories present little surprise. Navy is using the Community cloud-based services offered by commercial partners more than any other type. This spending rose from $183M in FY 2020 to $243M in FY 2022.

The remaining totals for spending on Hybrid and Public cloud are surprisingly balanced with the difference between the two being that spending on Hybrid cloud fell only slightly from $38M in FY 2020 to $35M in FY 2022. Spending on Public cloud, by contrast, fell considerably to $37M in FY 2020 vs. a total of $69M in FY 2020.

Wrapping up it is clear that the Navy, much like the Air Force, is growing its investment in cloud computing. The Navy’s growth is more moderate than the Air Force’s, but still strong. Navy customers are also spending more on SaaS and PaaS and on capabilities provided via a Community cloud-based environment.