IaaS Hosting Spending US Government to Grow Fivefold by 2017

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iaas-hostingResearch agency IDC has published a forecast that examines how the U.S. Federal government is spending part of its IT budget on cloud-based solutions. Infrastructure as a Service (IaaS) Hosting is a preferred type of hosting solution. According to the new report, IaaS will grow from $1 billion in FY2012 to $5.4 billion by FY2017.

IaaS hosting services delivered to US Government include networks, systems management, firewalls, load balancers, management of IP addresses and domain names, and more. In many other industries in the US, SaaS is the largest segment for cloud spending. But in government, IaaS is the leader.

According to the new report, “Perspective: Growth and Slight Contraction – Government Cloud Spending by U.S. Federal Agency,” spending increases for cloud have been scarce across federal agencies for two years, but IDC Government Insights expects to see an acceleration after fiscal year 2014. This boost is helped along by enterprise architecture standards and rules, which in turn helps to create a commodity approach to cloud solutions.

Public vs. Private Cloud Hosting

Public cloud server spending is not the big winner when it comes to federal cloud planning. In fact, spending on public cloud hosting is currently only about 10% of that for private cloud hosting solutions. Too many government agencies are nervous (correctly or not) about the level of security that can be promised by public cloud server solutions. But many agencies still are making investments in public cloud, for things ranging from development platforms to website or email hosting, or low-risk long-term data storage. Federal Public Cloud Hosting spending will rise from $110.4 million in FY2012 to over $118.3 million in FY2014. The Treasury Department is the leader here.

Private cloud hosting clearly is the top choice when it comes to federal cloud hosting solutions. Promises of greater security, control and privacy seem to hold the key to what federal agencies seek. In some cases we have seen new applications developed on a public cloud, which are later moved to a private dedicated cloud for their runtime environment. Federal Private Cloud Hosting spending will rise from $1.5 billion in FY2012 to over $1.7 billion FY2014.