Government IT: less spending, more cloud ahead

US federal IT spending is set to decline by 1.4% a year over the next five years.

That's the call made by Deltek in its Federal Information Technology Market, 2012–2017 report, which predicts a decline in the federal IT market from $121 billion in FY 2012 to $113 billion by FY 2017.

It's all about cost reduction and simplification. In perhaps an understatement in light of the impending fiscal cliff which mandates huge slashes in government spending by January 1st, the report states that "the uncertainty of sequestration and future budgets, which will cause agencies to rescope, cancel or shorten programs."

To meet the challenge to do a lot more with a lot less, agencies are emphasizing information security, data center consolidation, business systems modernization, cloud computing, mobility and Big Data solutions.

However, Deltek said the federal market has a lot of pressing needs, including cybersecurity, data center consolidation solutions, cloud computing, mobility, and analytics.

Cloud computing is a fast-growing area that will only gain, even as government IT spending shrinks. IDC Government Insights, for one, just released a study that shows a growing demand for cloud services and enterprise architecture resources among government agencies.

The survey of 400 government IT managers across all levels of government finds 90% anticipate cloud services will have impact on their computing infrastructures.  About 15.2% of respondents said they would dedicate between 1% and 10% of the IT budget to cloud endeavors.

However, cloud strategies need to be better communicated across agency leadership -- despite the fact that CFOs are often the people who drive their group's transition to cloud (due to potential cost savings) 60% of chief financial officers are only somewhat familiar with their organization's cloud strategy. IDC's Shawn McCarthy pointed out that the challenge is communication and education: "Lack of knowledge by some participants on the level of funding available to them to spend on cloud solutions as well as the needed enterprise architecture changes that can help agencies move more aggressively into cloud. By focusing on greater outreach efforts to bring all IT employees in line with enterprise cloud plans, government agencies can begin to benefit from cloud computing services.”

(Photo: Joe McKendrick.)