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Government Cloud Market: Forecasts and Analysis (2013 2018)


The concept of cloud computing has been around for a while, but only recently public sector and federal government agencies are making attempts to incorporate cloud based systems for data protection, file management and social services. Amidst declining budgets, aging workforce and other associated issues plaguing government organizations, cloud is considered to be the most suitable and appealing solution. Traditionally, public agencies operate in a strict hierarchical process, which led to a lot of time consumption in the activities, such as the approvals and purchase orders. Cloud offers the ability to eliminate these time consuming activities.

Security is one of the key areas of concerns for the government agencies. The government cloud market is largely dependent on the capability of the services providers to quickly meet the various regulatory and compliance requirements. In this scenario, hybrid model is considered to be an attractive option for balancing scalability and security. There are various portals in the market that offer the public sector agencies with comprehensive solutions that take due consideration of the security and other important requirements. It is recommended that there is a common platform for the procurement of cloud services, such as SaaS, PaaS, and IaaS services offerings. There are also few players who have emerged on the top of this game and also in the list of recommended services providers.

The government agencies of the major countries, especially the United States, are encouraging cloud adoption in a big way. In the recent past, the interest in cloud computing has grown exponentially in the Asia Pacific region, as well. Government organizations in these regions are leveraging cloud computing for various advantages. Few of such positives from the adoption of government cloud are increased standardization of IT infrastructure and minimization of costs in delivering technology solutions.

For government agencies and various other small public bodies, data transparency is an equally crucial matter. With the constant increase in compliance and regulatory standard requirements, cloud systems have to showcase even more high levels of integrity. And, big data makes the task little bit more complicated. Therefore, the cloud vendors have to standardize the systems, so that information can be easily delivered to any agency or system in any format. This process helps the government agencies to share information effectively among internal and external stakeholders. This is also a very important step towards improving accountability in the public sector. Federal Risk Authorization and Management Program (FedRAMP) has been developed that makes it mandatory for the commercial services providers (CSP) to understand the cloud ecosystem comprehensively and to receive a provisional authority to operate and host government data.

Despite decreased spending in some technology areas, the worldwide government IT spending is projected to increase. The major areas of spending include mobile technologies, IT modernization and cloud computing. These areas witness increased investments from the enterprises and SMB alike. Similarly, cloud computing in government sector continues to witness increased spending, as compared to the previous year, majorly driven by improved economic conditions and rapid movement from capital expenditure to operational expenditure. Federal Government spending includes areas such as healthcare, social security and homeland security. On the other hand, the spending by the state department is poised to decrease in the next few years, because of the economic slowdown.

According to MarketsandMarkets, the Government Cloud Market is expected to have a CAGR of 45.1% from 2013 to 2018 and the market is expected to reach to $18.48 billion in 2018.

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