The Three Year Trend in Agency Cloud Storage Use

Posted by Alexander Rossino on October 19, 2016

Cloud Storage Wars

A common notion is that federal agencies are moving only a small number of ordinary business applications (e.g., email, collaboration, etc.) to the cloud. This belief isn’t necessarily incorrect, but it captures only a certain portion of the cloud market that is highly visible. Less visible is the rapid adoption of commercial cloud storage solutions by agencies.

Demand for cloud-based storage is being driven by rapidly increasing stores of data coming from sensor networks, unmanned vehicles, surveillance video, social media, financial market monitoring, and the interaction of agency networks with the internet for a variety of citizen-facing purposes. These growing bodies of data are outstripping the ability (financial and otherwise) of agencies to store it in proprietary data warehouses when cheaper commercial storage alternatives are available. Add to the situation pressure from the White House and Congress for agencies to close data centers and the result is a perfect storm of pressure driving agencies to the cloud.

The chart below shows the total value of contracts awarded for cloud-based storage from fiscal 2013 to 2015. These are contracts that FMA has been able to identify with storage as the primary requirement, so the totals here should be considered just the tip of the iceberg.

Because some people prefer contract spending data to awarded contract value totals on cloud storage over the same period, we can provide this too. This data is shown below.

This spending data shows a similar result to the contract award data; specifically, that agency spending on cloud-based storage is ramping up despite the falling price of hardware storage solutions. In percentage terms, the rise of the total awarded contract value of cloud storage is 4500% over three years. For actual contract spending, the rise is a more modest 544%.

The dramatic rise in the use of cloud storage by federal agencies comes as no surprise. FMA has been forecasting it for several years now. Taking into account the growing pressure from various legislative initiatives, tightening budgets (a trend we don’t see abating), pressure from the administration, and growing options making the purchase of cloud storage easier for agencies, the trends in rising spending and contract awards should remain intact for years to come.