Civilian federal agency spending on data centers and cloud computing is stagnating, according to Bloomberg Government’s analysis of information technology budget submissions.
Spending on data centers by nondefense agencies will slow to $3.03 billion in fiscal 2017 from $3.08 billion last year, the submissions show. The stagnation follows a sharp drop in fiscal 2016 from $4.99 billion in fiscal 2015.
The drop in data center spending doesn’t equal more cloud investments. The submission for cloud spending has changed the categories reported for fiscal 2018 and is therefore difficult to compare with that of previous years. Because it’s unclear whether there was overlap between the categories in past years, Bloomberg Government focused on the fiscal 2018 submission, which includes data for fiscals 2016 and 2017 and a projection for fiscal 2018.
Civilian cloud spending increased to $5.3 billion in fiscal 2017 from $4.9 billion in fiscal 2016, and it’s expected to decrease to $5 billion in fiscal 2018. More than half of agencies would see a decline in fiscal 2018 cloud spending, with the largest drops coming at DHS ($160 million decline) and Education ($82 million decline). HHS and VA expect to see an additional $52 million and $25 million, respectively, next year.