Cloudy Outlook

The impact of Obama IT initiatives like a shift to Web-based services is as yet unknown.

The buzzword in federal information technology spending this year is "cloud computing"-the outsourcing of IT services to software and hardware providers.

But that migration will have to wait for future budget cycles. The fiscal 2009 budget was conceived in the final year of the Bush administration before President Obama formulated the idea to experiment with Web-based services.

Obama, heralded as the "technology president," is learning that innovative applications take time to make their way through regulatory and budget cycles and into practice. Any cost savings or efficiencies from cloud computing might not be evident until 2012, because it takes a long time to deploy a new platform at even one agency, says Ray Bjorklund, senior vice president at FedSources, a market research firm.

The president's fiscal 2010 budget proposal to shift to Web-based services seems to recognize the slow pace of IT program overhauls. "Of the investments that will involve upfront costs to be recouped in out-year savings, cloud computing is a prime case in point," the budget states. "Initial pilots conducted in collaboration with federal agencies will serve as test beds to demonstrate capabilities, including appropriate security and privacy protection. . . . Expected savings in the out years, as more agencies reduce their costs of hosting systems in their own data centers, should be many times the original investment in this area."

Aside from a slight bump in spending due to stimulus funding, fiscal 2009 will look a lot like 2008 in terms of IT programs. The government's 2009 IT budget is $70.7 billion, up from $66.4 billion in fiscal 2008, according to the Office of Management and Budget. Most of the 7 percent increase represents the same natural growth seen between 2007 and 2008 as a result of expanded programs, additional reporting requirements and cost overruns.

The Obama administration, for now, is executing a holdover IT initiative from the Bush administration, known as lines of business. The approach aims to save money by consolidating systems for routine operations such as financial management and human resources. Mark Forman, former administrator of e-government and IT at OMB, introduced the initiative about midway through the Bush administration, "and it took a little while to get some ground speed," Bjorklund says.

First quarter 2009 spending on IT services was about the same as in the first quarter of 2008, says Stan Soloway, president and chief executive officer of the Professional Services Council, a contractor trade group. "IT spending has been strong and almost by definition must continue to be strong based on the policies Obama has put forth," including governmentwide cybersecurity initiatives, new energy infrastructures and nationwide implementation of health information technology, he says.

As for Obama's plan for Web-based services, it could take IT managers time to wrap their heads around the concept of government as a platform-the term federal Chief Information Officer Vivek Kundra uses to describe cloud computing. "If you were to ask most of the people who are in federal IT, they would say, 'Yeah, it sure is cloudy out,' " jokes Larry Allen, president of the Coalition for Government Procurement, an industry group, referring to the tendency of government to be one of the last adopters of breakthrough technologies.

Even if agencies do move to cloud computing in the near future, it might not result in less spending. "That might mean less need for servers-but it doesn't speak to all the other aspects of IT and network support," Soloway says.

Click here for the top 50 technology contractors.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.