Federal Cloud Computing Spending to Reach $9.1 Billion by 2024, According to Deltek
New Deltek report forecasts cloud computing investments by federal departments and agencies
HERNDON, Va. – September 19, 2019 – According to a new report from Deltek, federal cloud computing spending is poised for strong growth, even within a relatively flat overall IT market. The benefits of cloud computing – cost savings, improved cybersecurity, enhanced mission efficiency and operational effectiveness, and improved citizen service delivery – make its implementation central to federal IT modernization strategies. White House and Congressional pressure for agencies to leverage modern commercial capabilities and divest expensive legacy IT infrastructure is growing and motivating agencies to develop more aggressive strategies for cloud adoption.
Deltek’s Federal Cloud Computing Market, 2019-2024 report, produced by the GovWin Federal Market Analysis team, explores these issues and other key policy, acquisition, and spending trends that are shaping the federal cloud computing market. Deltek predicts cloud investments growing from $5.3 billion in FY 2019 to $9.1 billion in FY 2024 at a Compound Annual Growth Rate (CAGR) of 9.6%.
While improved cybersecurity is a key driver of cloud adoption, agencies are also considering cloud platforms in their strategies for artificial intelligence and machine learning. The convergence of alternative funding models, best practices and implementation guidance sets the groundwork for an increase in the pace of cloud computing adoption.
- Cloud adoption is driving the modernization and optimization of federal networks, prompting some agencies to adopt emerging technologies such as software-defined networking.
- The growing complexity of multi-cloud environments is making industry partners indispensable for integration and management services. This will continue for as long as agencies lack in-house expertise and automated solutions.
- FedRAMP certification is now mandatory to be competitive. Some evidence suggests that agencies may be requesting higher certification levels than some tasks require, so contractors are advised to aim for the Moderate Impact certification level at a minimum to remain competitive.
- Revised Trusted Internet Connections (TIC) policy should remove roadblocks to cloud adoption. Until a form revision becomes available, agencies are choosing solutions tailored to their own needs.
- Traditional contractors remain competitive in the federal marketplace despite the expansion and positioning of large commodity providers. This is largely due to agencies’ ongoing reliance on traditional contractors for engineering expertise.
Deltek Analyst Quotes
“The pieces are falling into place for a surge in cloud adoption across the federal government. Agencies have technical expertise at their fingertips, acquisition vehicles to use, flexible funding mechanisms and support from the administration and Congress. All of these things combined suggest that spending should rise substantially over the next five fiscal years.”
– Alex Rossino, Senior Principal Research Analyst, Deltek
“Given the focus on both reducing IT infrastructure and acquisition costs and improving return on investment, contractors with solutions that help agencies meet both of those challenges will be well positioned in this market.”
– Deniece Peterson, Director of Research, Deltek
For more information, download the Federal Cloud Computing Market, 2019-2024 report here.
GovWin is the leader in market intelligence for businesses selling to the public sector. We provide enterprise, mid-market and small business customers with the most comprehensive set of federal, state, and local government contracting leads. Clients grow their sales pipelines with access to expiring term contracts, pre-RFP information, and planned, funded projects, along with government contacts, competitor information, and market analytics – all backed by our holistic integration and expert support.
Better software means better projects. Deltek is the leading global provider of enterprise software and information solutions for project-based businesses. More than 23,000 organizations and millions of users in over 80 countries around the world rely on Deltek for superior levels of project intelligence, management and collaboration. Our industry-focused expertise powers project success by helping firms achieve performance that maximizes productivity and revenue. www.deltek.com