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It was less than two years ago the federal government began egging

on its agencies to adopt a “Cloud-First” rule to IT procurement and

“Shared-First” initiative to pare down its $80-billion-a-year

 budget. It appears that efforts to replace on-premises systems with

cloud services are actually bearing fruit, at least one study shows.

The study goes even further — if agencies really got aggressive

about cloud, they could shave $12 billion off the annual IT tab.

That amount almost covers NASA’s entire annual budget.

 A federal IT consortium now estimates that federal agencies are now already 

saving about $5.5 billion annually with their cloud implementations, but

that’s only part of the story. It’s likely that this savings will rise to $12 billion

as cloud efforts move forward.

That’s the call from MeriTalk Cloud Computing Exchange (CCX), a

community of Federal cloud leaders. The rosy savings numbers come from a

newly released survey of 108 federal IT managers that extrapolates the cloud

numbers from reported savings. On average, the IT executives report a

savings so far of at least 7% off their IT budgets for the next fiscal year. Based

on the 2013 IT budget of $78.9 billion, that’s about $5.5 billion in annual

Federal savings, the study concludes.

 After three years of cloud, savings may really begin to pile on. Based upon

input provided by Feds, agencies could have

shaved 15% of their IT budgets for the last

three years with cloud, or approximately $12 billion per year. According to

MeriTalk, federal agencies and departments could have cut between $2 and

$3 billion by clouding steady-state programs and $25-$32 billion by clouding

new IT investments over the past three years.

Respondents also report than more than one-tenth of their annual IT

 budgets, 11%, is now spent on cloud resources. MeriTalk CCX estimates that

this totals at least $8.7 billion, based on the 2013 federal IT budget of $78.9

 billion.

The survey found differences in cloud attitudes between Department of Defense and civilian respondents. DoD respondents are more positive about

cloud’s impact, believing that the FY 2016 IT budget will decrease to $72.4

 billion, while civilians think the budget will increase to $80.1 billion.

 

TECH  |  4/30/2012 @ 1:36AM | 26,885 views

Cloud Could Cut $12 Billion fromUS Government Annual Deficit:Study 

Joe McKendrick, ContributorI track how technology innovations move m arkets an d careers

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There is still a cloud on the cloud horizon, however, and that is security. A 

majority of the IT managers, 85%, say they are worried about the security 

implications of moving their operations to the cloud. Additional worries come

in the form of culture (38%), and service levels (32%).

Further, Federal government respondents noted there is, to a degree,

opposition from executives within their agencies about cloud adoption.

Leading the hesitancy towards cloud were IT leadership (20%), program

management (18%), and legal (at 17%).

Seven out of ten respondents expect an increase of cloud-based applications

 within the next two years. The most popular applications being moved to the

cloud to help drive these savings include collaboration tools 48%, Email

(47%), Administrative applications (43%), Conferencing software (28%), and

“Mission applications” (which presumably mean core business functions,

25%), and program or project management, 16%. DoD respondents were more

likely to see administrative applications as the leading cloud area, civilian

respondents favored conferencing software.

Now the big question is whether we’ll actually start to see that $12 billion

savings a year, or if it will be absorbed into other federal deficits. Of course, we

already know what the answer is.

But this study — even if the savings numbers are way too optimistic — is a

significant endorsement of cloud computing by the world’s largest

organization. If the US government – not known for its cost-cutting acumen –

is shaving 10% or more of its IT budget, and the no-nonsense Defense

Department is bullish on cloud savings, imagine the possibilities for a private-

sector company.

This article is available online at:http://www.forbes.com/sites/joemckendrick/2012/04/30/cloud-could-cut-12-billion-from-us-government-annual-deficit-study/