Federal cloud services contracts are projected to hit $6.5 billion in fiscal year 2018, an increase of 32 percent over FY2017, according to an analysis by Bloomberg Government.
The report also pointed out that Federal agencies still have FY2018 spending authority for cloud and other services, but that time is running out to use that funding.
“The $1.8 billion in remaining spending, with less than a month of the fiscal year left, could mean a rush to award cloud contracts and task orders before Sept. 30,” the report states.
The year-over-year spending increase shows how Federal agencies across government are embracing cloud services, with civilian agencies spending a total of $4.4 billion in FY2018, and Department of Defense (DoD) agencies spending around $2 billion on cloud contracts.
Among the top spenders on cloud service are DoD, the departments of Health and Human Services and Veterans Affairs, and the National Aeronautics and Space Administration. Combined, their spending makes up over half of total Federal government cloud spending this year.
Federal agencies are not lacking for private sector help in shifting to cloud service. Bloomberg Government’s research also analyzed the top cloud service vendors in the market, finding Perspecta to be the largest vendor, with 11.7 percent of the market in FY2017 and FY2018. Other top vendors include General Dynamics, Leidos, and Science Applications International.
According to Bloomberg Government’s research, the increase in Federal government cloud spending FY2018 marks the eighth consecutive year of higher spending in the Federal cloud market, with no slowdown is in sight.
“Moving into fiscal 2019, Bloomberg Government expects cloud services spending to continue rising. Agencies throughout the federal government are completing cloud services contracts, and many of them will be awarded in fiscal 2019,” the report says.