Federal Cloud Computing Market, 2020-2022

Published: August 27, 2020

FeaturedFederal Market AnalysisCloud Computing

Deltek’s Federal Cloud Computing Market, 2020-2022 report explores key policy, acquisition and spending trends that are shaping the federal cloud computing market.

The pressure is on for federal agencies to modernize their information technology environments. With legacy IT infrastructure growing older, more expensive to maintain and less secure against modern threats, agencies are adopting cloud solutions more aggressively than ever. Revised Trusted Internet Connections (TIC) policy is alleviating network bottlenecks while the growing number of cloud capabilities approved by the General Service Administration’s FedRAMP security program is providing agencies with a wider choice of trusted solutions. Agencies are also reskilling IT workforces to manage cloud technology and using a wider array of acquisition vehicles for cloud procurement.

The Civilian sector, which has long been more comfortable with cloud computing than the Department of Defense, still leads federal investment. However, the DOD now has the policies, leadership, acquisition vehicles and trusted partners in place to rapidly accelerate adoption. Additional factors driving agency adoption include the need to improve cybersecurity, a desire to leverage emerging technologies (such as artificial intelligence) on cloud platforms, and the sound approach to “as-a-Service” solutions outlined in the Office of Management and Budget’s Cloud Smart policy.

Deltek forecasts that agency demand for vendor-furnished cloud computing goods and services will grow from $6.8 billion in FY 2020 to $7.8 billion in FY 2022 at a Compound Annual Growth Rate (CAGR) of 4.6%.

Changes to Deltek’s Cloud Market Forecast Due to COVID-19

Due to the unique circumstances of the COVID-19 pandemic, including the uncertainty of its impact on future federal budgets and operations, FMA has narrowed its forecast focus to “near term,” covering only FY 2020–2022.

Key Findings

  • Accelerating Adoption Rates. Even before the COVID-19 public health crisis, federal agencies were accelerating the use of cloud-based capabilities, application hosting provided by commercial partners, and the development of new capabilities in cloud environments.
  • Spending on SaaS and PaaS Grows, While IaaS Falls. While spending on Software-as-a-Service and Platform-as-a-Service is growing across government, spending on Infrastructure-as-a-Service appears to be weakening in the market-leading Civilian sector. This suggests many agencies may have already contracted sufficient commercial cloud infrastructure, but still require modernized SaaS capabilities.
  • Defense Commits to Commercial Cloud. After years of planning, the Department of Defense appears to be firming up its commitment to commercial cloud, estimating that $300M of its planned Fiscal Year 2021 cloud budget will be spent with commercial providers.
  • TIC Reform Supports Adoption. After years of complaints about antiquated Trusted Internet Connections policy creating roadblocks to adoption, new TIC 3.0 guidance is making it easier for agencies to choose cloud connectivity solutions tailored to their needs.
  • Sound Data Management Makes a Difference. The growing focus on sound data management across government, including the hiring of Chief Data Officers, is prompting agencies to leverage commercial cloud services that are more secure than legacy data centers.
  • Critical Insight for Vendors

    Deltek’s Federal Cloud Computing Market, 2020-2022 report takes a strategic 3-year view of the market factors shaping federal acquisition and use of commercial cloud computing services.

    The report provides:

  • Insight into the factors, policies, and strategies shaping the cloud market.
  • Analysis of the dynamics shaping agency spending on cloud computing.
  • Identification of opportunities for cloud business development.
  • Spending profiles and forecasts for the top 18 agencies using cloud computing solutions.
  • Recommendations to help contractors evaluate the impact of trends on their business.
  • Deltek's Federal Cloud Computing Market, 2020-2022 report is delivered in PowerPoint® format, including a PowerPoint® Executive Summary, and an Excel® data workbook.

    Table of Contents

    Federal Cloud Computing Market, 2020-2022

    Introduction

  • Purpose of the Report
  • Deltek’s Cloud Spending Methodology
  • Key Findings
  • Market Analysis

    Budget Environment

    Market Trends and Drivers

    Cloud Computing Spending Trends

    Competitive Landscape

    Deltek’s Cloud Computing Market Forecasts

    Agency Analysis

  • Air Force
  • Army
  • Navy
  • Defense
  • Health and Human Services
  • Veterans Affairs
  • Commerce
  • Agriculture
  • Treasury
  • Homeland Security
  • General Services Administration
  • State
  • Justice
  • Social Security Administration
  • NASA
  • Energy
  • Interior
  • Labor
  • Conclusions and Recommendations