Federal Agencies are Turning to Cloud-Based Analytics

The federal cloud market continues delivering surprises. For years, agencies dragged their feet when it came to using cloud computing until mandates from the Office of Management and Budget, and pressure from Congress, pushed them in that direction. Now the latest spending data shows that they are leveraging cloud for access to advanced analytics and other cutting edge big data capabilities.

Total Spending

The chart below shows spending on cloud based big data capabilities from fiscal years 2021 to 2023.

As we can see, it has been rising steadily at a clip of between $400M and $500M per year. That equates to growth of 102% over three years.

Spending by Market Sector

When it comes to parsing the data by market sectors, it is possible to see where the growth in the total market has been most steady.

 

Defense sector spending grew the fastest from FY 2021 to 2022. It then tapered off a bit from FY 2022 to 2023, leading to a lower total in that latter fiscal year. Civilian sector spending, meanwhile, jumped one year later, from FY 2022 to 2023, bringing it more in line with the Department of Defense (DOD).

Leading Agencies by Total Spending

Here is the data listing the top ten federal agencies by spending on cloud-based big data solutions.

The various parts of the DOD clearly lead in the use of cloud-based big data solutions. Even the U.S. Army, which is often considered technologically challenged compared to the other parts of the DOD is using advanced analytics, visualization, data mining, etc. solutions provided via the cloud.

When it comes to civilian agencies, the presence of the Social Security Administration at the top of the heap is somewhat surprising. It is, after all, a much smaller agency than Veterans Affairs or Homeland Security. Seeing the Department of Education on this list is also surprising, although that department has quietly amassed a sizeable portfolio of cloud capabilities.

Spending by Top Solutions

Further breaking down the data by spending on vendor solution yields the following insight.

Palantir leads all competitors when it comes to providing cloud-based analytics capabilities. The DOD is a particularly heavy user of Palantir’s cloud services. Two of SAP’s FedRAMP-approved cloud offerings are also represented. Readers might notice some big names missing from this list. This is probably because of the lack of clarity in Federal obligations reporting. Companies such as Google could be on this list, but without spending being reported as going to Google it will fly under the radar. The companies shown are those which could be confirmed for identified cloud contracts.

Final Thoughts

Surging spending on cloud-based analytics makes the big data niche an attractive one. And now with the FedRAMP PMO focused on making more cloud-based artificial intelligence capabilities available, future growth promises to be even stronger.

For those who want more, the data featured in this post comes with the latest Deltek Federal Cloud Computing Market, 2024-2028 report, which is now available for purchase.