U.S. government expected to spend $3.2 billion on cloud computing by 2017

May 15, 2012

Federal government spending on cloud computing services is expected to grow 34 percent per year, up to $3.2 billion in 2017, according to a report from an enterprise software company.

Currently, the government will spend $734 million in the 2012 fiscal year on cloud services with the June launch of the Federal Risk and Authorization Management Program is expected to quicken the pace of government migration to the cloud. FedRAMP seeks to standardize the cloud security among the different service providers. The program has been in the works since 2010, but the General Services Administration took a step toward implementation when it announced the nine organizations that would be responsible for assessing and monitoring cloud providers to ensure they comply with the program.

Resistance to "Cloud First"
Since the "Cloud First" policy - pushing government agencies to prioritize cloud computing - came into being in 2010, IT decision makers have been hesitant to embrace the fast-rising technology.

Data security in the cloud still remains one of the biggest issues slowing the adoption of the cloud throughout the government. In a study by Meritalk - a government IT online community - 85 percent of the 108 federal IT professionals who responded claimed that data security was a holdup in the adoption process.

Calming the fears
With the new standardized security program ramping up in the next few months, many hope the fear of the cloud will subside.

"I think FedRAMP will help us tremendously," National Archives and Records Administration CIO Michael Wash told the E-Commerce Times. "The program will provide a standardized approach to security assessment, authorization and continuous monitoring for cloud products and services."

Broader implementation means greater savings
Not every department is on the same page when it comes to their readiness to move to the cloud. According to the study by the enterprise software company, departments like Health and Human Services and Transportation - whose Enterprise Service Center made the GSA list of assessors - are well prepared, thanks to significant investment and progress made in "data center and infrastructure consolidation."

Broad and near-term mandates requiring quicker cloud adoption and the standardization process of FedRAMP will look to bring more departments into the fold. The savings from going to the cloud in the 2013 fiscal year will save 7 percent of the annual IT budget, amounting to $5.5 billion, according to Meritalk. The total potential savings - just with the current budget and cloud capabilities - could have been as much as $12 billion per year.

-McAfee Cloud Security