Reminders

Federal Cloud Spending Trickles Temporarily Downward, While Security Spending Grows

By Shawn P. McCarthy – April 26, 2017
OfflinePhoto of Shawn P. McCarthy

Shifting priorities in U.S. federal information technology spending can best be understood by holding a lens up to two recent trends.
1.Total federal cloud spending for Fiscal Year 2017 is expected to decrease by 17.2% (vs. FY 2016). That’s a substantial drop, from $2.6 billion to $2.2 billion.
- Besides classic cloud spending, this year, federal agencies will spend $4.1 billion on cloud-like solutions, which are best described as falling into a provisioned/shared services/other category. This too is down a bit, from $4.6 billion last year.
- This mix of formal cloud spending and quasi-cloud spending is why you sometimes see total cloud spending listed as somewhere in the mid $6 billion range.
2.Total Federal IT security spending for FY 2017 is expected to increase 7.9%, from just under $3.5 billion to a little over $3.7 billion.

While the Trump administration has emphasized that it will focus on various types of cost cutting for the next few years, the decrease in cloud spending actually has its genesis in the formulation of the FY 2017 budget, which took place before the 2016 election.

Basically, cloud plans are hitting the doldrums this year, after several years of steady growth. But security spending has ramped up in response to rapidly expanding networks (thanks to the Internet of Things) and multiple international hacking attempts.

 

About the author

Shawn P. McCarthy

Research DirectorIDC Government Insights

<p>Analyst and research director at IDC since 2004.</p>

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