Federal government cloud adoption will triple by 2013, report says

Government agencies are moving slower on cloud computing than the IT industry as a whole, but federal government spending on the cloud will nearly triple by 2013, a new report says.

“Adoption has been slow; federal and state and local government organizations are gun-shy about migrating capabilities – especially mission-critical capabilities – to ‘the cloud,’” market research firm INPUT states in Evolution of the Cloud: The Future of Cloud Computing in Government. “However, the convergence of tight budgets, aggressive market players, and increasing acceptance of the cloud computing model will fuel an uptick in demand for cloud computing.”

Federal government use of cloud computing services added up to $277 million in 2008, and will increase steadily until reaching $792 million in 2013, the firm predicts. The 2013 figure will still represent less than 1% of total forecasted government IT spending of $87.8 billion.

INPUT, which conducts market intelligence research for government contractors, is seeing a shift in government attitudes toward technology with the change from the Bush to Obama administrations.

New federal CIO Vivek Kundra is bullish on cloud computing technology, notes INPUT principal analyst Deniece Peterson. Bush’s administration did not have a CIO or CTO for the overall federal government, although individual federal agencies did have executives filling those roles, she says.

“This administration seems to be much more technology-savvy than the last one,” Peterson says.

The INPUT report divides cloud computing into three general areas: Web-based applications (software-as-a-service), storage and computing (infrastructure-as-a-service), and application development (platform-as-a-service).

Software-as-a-service is driving adoption of cloud computing within government agencies. For example, state and local government spending on software-as-a-service will grow from $170 million in 2008 to $635 million in 2013, according to INPUT.

It’s already common for government to use cloud-based e-mail, payroll, Web conferencing and sales applications, Peterson says.

“Software-as-a-service is the driver of cloud computing in government right now, because it seems to be the easiest way to transition into it,” she says.

It will take longer to move mission-critical applications to the Web-based model because of worries about data security and privacy. The private sector may actually be able to provide more robust security than government itself, but security of the cloud remains the top concern among government users, Peterson says. INPUT is advising vendors to build government-specific cloud services to address security and regulatory requirements.

Government adoption of cloud computing “will lag well behind the private sector due partly to cultural resistance as well as a lack of tools tailored specifically to the wide variety of government-specific business processes,” INPUT writes. “This sort of tailoring will tend to come after larger vendors have begun bumping up against the limits of their private-sector market reach and begin looking for new niches.”