The benefits of enterprise-class cloud computing, and particularly the agility and scalability afforded by migrating to IaaS cloud solutions, is driving U.S. federal investment. According to the first ever government insights report by the IDC, U.S. government spending on the private cloud alone is projected to hit $1.7 billion in the fiscal year 2014. The government is also expected to spend $118.3 million on public cloud solutions as well. Taken together, the massive spending on cloud computing indicates federal confidence in enterprise cloud solutions for data protection and more cost-effective, high performing infrastructure. Shawn McCarthy, IDC research director, said that federal investment will increase at a higher rate in 2015, and by fiscal year 2017, private cloud spending could be in the $7.7 billion range.

“For the past three years, the U.S. Federal CIO Council has been urging government agencies to move away from stand-alone computing solutions and toward cloud-based solutions,” the report stated. “That effort is slowly having an effect on agency-level cloud spending. Government lags behind the private sector when it comes to cloud investment, but even as a latecomer, its consumption will accelerate.”

The report noted that cloud investment, like many other areas of government spending both inside and out of the technology sector, had been slowed by sequestration. However, the IDC expected the sluggishness to abate during fiscal year 2014. They asserted that private cloud adoption will continue to be the only choice for many government agencies, both due to concerns about privacy and data security as well as the amount of legacy infrastructure being moved to the cloud. Government organizations can ill afford a data breach or an operations slowdown because of activity in a shared cloud scenario.

IaaS cloud adoption highest among federal cloud solutions
IaaS clouds have the leading adoption rate for government agencies, the IDC reported. Investment in IaaS will grow to $5.4 billion by fiscal year 2017, up from $1 billion in fiscal year 2012. The IDC noted that the reliance on large systems integrators (SIs) by federal agencies makes the move to IaaS a sensible and straightforward one. Virtual machines, cloud networks and file-based storage are all logical next steps for federal SIs.

SaaS and PaaS spending will also increase during that time frame, to $2.4 billion and $1.1 billion, respectively. The Social Security Administration, charged with compiling and protecting the personal information of all U.S. citizens, is the leading consumer of private cloud services among federal agencies. It is the top user of IaaS and PaaS as well, while the Justice Department is the leading consumer of SaaS.

Forbes contributor John Foley recently wrote about the move of many government organizations to “everything as a service” models. He highlighted the Department of Homeland Security in particular, which has utilized SaaS extensively to deliver IT and critical business capabilities to its component agencies. It utilizes private clouds to offer nine different services, and its offerings include business intelligence as a service, case management as a service and identity proofing as a service.