The IDC (www.idc.com) research group has evaluated how the U.S. Federal Government is spending part of its IT budget on cloud-based solutions. According to the new forecast, cloud spending now represents about 5% of all IT spending by the federal government. IDC Government Insights expects that the growth will continue into FY2015 (fiscal year 2015).

For five years, both the U.S. Federal CIO Council and the Office of Management and Budget (OMB) have been pushing government agencies to move some types of IT systems to the cloud, particularly new systems, stored data, and mobile solutions. The ongoing level of spending on cloud solutions indicates that this effort is finally having a significant long-term effect. Total cloud spending is going up and the nature of cloud spending itself is changing.

Key highlights from the IDC forecast include:

° Federal cloud spending for FY2014 will come in higher that originally predicted. A year ago, OMB stated that agencies are slated to spend a little over US$2.2 billion on cloud solutions for 2014. By the end of this fiscal year, that number will grow to more than $3 billion. 

° As in the previous two years, OMB has predicted a slight pull-back on cloud spending for upcoming FY2015. The current estimate is just under $2.9 billion for next year, however, IDC Government Insights believes that cloud spending will actually increase, not decrease, for FY2015, rising to perhaps to as much as $3.4 billion.

° Software as a Service (SaaS) is passing Infrastructure as a Service (IaaS) as the largest type of cloud spending. Last year, OMB estimated that agencies would spend $1.2 billion on IaaS and $724 million on SaaS for FY 2014. This meant that government was different than other industries, since most spend more of their cloud dollars on SaaS. But by the time FY2014 ends on Sept. 30, the federal government will have spent just $986 million on IaaS, and over $1.3 billion on SaaS.