IaaS drives up U.S. fed cloud spending by 25%

U.S. federal government spending on cloud computing jumped 25% in the past three years, driven by infrastructure-as-a-service (IaaS) investment.

An article by Nextgov discusses the finding of a recent report by big data analysis firm Govini that shows strong cloud spending. This follows an earlier report that government spending on the Internet of Things (IoT) has risen 20%.

In its analysis, Govini found that in 2015 the federal government spent $3.3 billion on cloud computing, representing a rise of 25% from $2.6 billion in 2012. That year was a particularly weak year for cloud computing investment by the government, as sequestration had driven spending down to a 5-year low in 2012.

IaaS was the key driver of the increased cloud spending, as more federal agencies undertook programs to modernize their IT infrastructure. These agencies accelerated IaaS spending by 53% in the past three years, rising from $585 million in 2012 to $897 million in 2015.

This push for modernization comes as federal agencies attempt to cope with the onslaught of the IoT technology, which involves the mass proliferation of connected equipment.

“Agencies have an infrastructure modernization gap between the standards for what they need to be doing for things like the internet of things and where they are right now,” said Govini’s Matt Hummer. “The mission of agencies and their data and mobility are really driving cloud.”

The companies which benefited most from the higher government spending were IBM and cloud resellers InfoReliance and DLT Solutions. IBM generated $1.1 billion in cloud revenue since 2011, giving it the market leading position in IaaS offerings.

IaaS hampered by lack of budget

Govini found that cloud computing investment was hampered by erratic or insufficient budgeting for modernization.

“A big challenge a lot of agencies are having is they are ad hoc buying cloud wherever they can where the dollars allow them to do that,” said Hummer.

However, new resources are on the horizon that should allow increased flows of funding for cloud investment. For example the $3.1 billion IT Modernization Fund is allowing agencies more funding on cloud, and the 2017 budget includes $7.3 billion for provisioned services such as cloud computing.

U.S. government spent 20% more on IoT last year

The private sector may be driving new Internet of Things (IoT) technology, but a new study shows the US government is rapidly hopping on board.

An article by Nextgov reports that a new study by research analysis firm Govini revealed that federal agencies are rapidly boosting their spending on sensor-driven technology. In fiscal 2015, the federal government spent $8.8 billion on IoT, which represents a 20% jump from fiscal 2014.

Sensor spending specifically grew a considerable 56% from the previous year, while cloud storage for the data produced by those sensors grew by 48%.

This increased spending comes as the government increasingly works to define its role in policing the burgeoning IoT market and develop the policy environment to help the industry grow.

The Govini report found that most of the IoT growth came from the area of defense, which accounted for 88% of sensor spending in the previous four years. Key departments include Homeland Security which invested in a connected sensor network to monitor the US border and the Pentagon, which employs IoT tech to help soldiers improve their situational awareness.

DoD & NASA biggest government IoT consumers

A big non-defense spender was NASA, which has developed a connected network of devices and sensors to observe space and terrestrial patterns.

IoT A notable example of defense-related IoT tech is the Persistent Threat Detection System by Lockheed Martin, which observes the nearby area via tethered aircraft.

The IoT supply chain for defense spending was dominated by such large contractors as BAE Systems, Northrop Grumman, Raytheon and Lockheed Martin.

Though big players like these are currently dominating the federal government IoT supply chain, Govini’s Matt Hummer told Nextgov in an interview that newcomers could still find opportunities to supply the US government.

He said that federal information security protocols make it easier for smaller IoT firms to partner with big contractors when supplying federal departments and agencies. Part of this opportunity lies in the ambiguity of feds’ requests for proposals when constructing new networks which rarely mention the specific term “internet of things.”