Cloud Storage Gets a Boost From the U.S. Government

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For all the bad press that cloud storage has gotten in the wake of the recent celebrity nude photo hacking scandal, business is still booming. The consumer market for cloud storage hit record levels last year and is expected to grow further throughout the decade. Companies selling cloud storage for enterprise customers are expected to see even more growth, much of it coming from governments that need secure ways to store massive amounts of data.

Market research firm IDC this week released a new report showing that cloud services spending by the U.S. government is on the rise. The report shows that federal spending on cloud infrastructure is already 5% of the government's total IT expenditures.

According to IDC's data the U.S. government is set to spend over $3 billion on cloud services during 2014. Though the Office of Management and Budget (OMB) predicts that cloud spending will hold steady or decrease slightly next year the IDC report foresees an increase to as much as $3.4 billion in cloud spending in 2015.

"Clearly cloud growth is ramping up in the U.S. Federal Government," said Shawn McCarthy, a research director for IDC. "Spending went higher than originally predicted this fiscal year and we expect that the growth will continue into FY2015, even though the Office of Budget Management has indicated that it will cut back slightly on cloud spending. The main reason we believe that growth will continue is that cloud is proving to be a cheaper solution in some cases for government agencies. For that reason alone, some will make the switch, although that kind of commitment should not be made without a detailed return on investment analysis."

IDC believes this increase in cloud spending is thanks to the work of the Federal CIO Council and the OMB. For five years now those agencies have been steering other government agencies toward cloud solutions for their IT systems.

Currently the U.S. government is spending more on software as a service (SaaS) solutions than on infrastructure as a service (IaaS). IDC predicts that IaaS could see more government spending over the long term.