Fed IT Cloud Migration Sees Slow but Sure Increased Investments

Federal agencies have made a slow but sure increase in cloud service investments, according to a Government Accountability Office (GAO) report last week.

In FY2016, the 16 agencies that the GAO reviewed saw an average 8 percent increase of IT systems run on the cloud, and that rate has increased to 11 percent in FY2019.

The average increase in cloud adoption, however, varies across different agencies. Some agencies showed significant increases in cloud investment, namely the General Services Administration and Social Security Administration (SSA), which saw an increase in cloud investing by 38 and 35 percent, respectively, in FY2019.

On the other hand, the Departments of Energy and Labor saw no change in cloud investment, while the Departments of Defense (DoD), Education, Homeland Security, and Veterans Affairs saw a one to five percent decrease in cloud use.

DoD not only had a decrease in cloud use – specifically from four percent in FY2016 to three percent in the following three fiscal years – but it also had the smallest percentage of IT investments in cloud of all agencies. However, DoD is expected to announce a $10 billion cloud contract as early as this summer, so signs of moving toward further cloud adoption are on the horizon.

Although GAO said the data is incomplete, 13 of the 16 agencies – excluding DoD, SSA, and the State Department – GAO reviewed reported cost savings after increasing cloud service adoption.

“In total, the 13 agencies’ provided data showed that they had accrued approximately $291 million in savings or cost avoidances using cloud services since 2014,” GAO said. “In addition, the agencies’ data indicated that they planned to save at least $150 million in fiscal year 2018 and beyond.”

Further, 15 of the selected agencies reported benefits from acquiring cloud. The perks they identified included improved IT service delivery, cost savings, and modernized systems.

As further cloud adoption ensues, GAO recommended that the Office of Management and Budget require agencies to explicitly report cost savings and avoidances associated with cloud computing and that Federal agencies create mechanisms to track those savings, as well as IT investment assessments, as they move to the cloud.