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New proposed federal budget will turn toward the cloud to curb IT costs

By Max Burkhalter
February 18, 2011
In the recently proposed federal budget for 2012, President Barack Obama expressed the need for newer technologies as well as data center consolidation, both of which would likely lower IT costs during the upcoming year.

The adminstration’s proposal calls for nearly $80 billion in IT costs during fiscal year 2012, beginning in October - a 1.9 percent increase from 2010. IT spending for the current fiscal year is under Continuing Resolutions, which will allow the government enough funding to run through March 4. The administration believes it will be able to curb further spending and keep it at a constant for some time, with $3 billion in savings coming due to IT consolidation and the implementation of cloud computing.

One of the the adminstration’s main IT plans during the next several years is to consolidate their data centers and reduce the cost of running them. In December, the government announced its plan to close more than 800 of its 2,100 centers by 2015. The government’s plan is to turn toward cloud computing, among other technologies, to manage its IT responsibilites.

Earlier this month, federal chief information officer Vivek Kundra outlined a cloud-first strategy for federal agenices. By adopting the cloud, Kundra estimates nearly $20 billion, or 25 percent of the government’s IT spending, will be focused on shifting toward cloud computing platforms. However, doing so would reduce the amount of data center expenditures by nearly 30 percent.

In 1998, the government employed just 432 data centers; however, that figure jumped by 385 percent during the next 12 years, with 2,094 existing in 2010. The newly proposed budget, through the help of cloud computing and virtualization as managed IT services, will lower the total to 1,284 by 2015, according to the Office of Management and Budget.

In regards to cloud computing, the OMB estimates nine federal agenices could each spend $1 billion on its technologies. The departments of Homeland Security and the Treasury top the list, each spending upward of $2.4 billion.

"We think we can save some of that money by moving use cases at the low and moderate levels," said Sanjeev Bhagowalia, the associate administrator in the General Services Administration's Office of Citizen Services and Innovative Technologies. "The economics are driving this transformation. Cloud is not necessarily cheaper, but you can do certain things faster. We've been able to deploy capabilities in three months that would normally take nine months."

In addition to this federal involvement, officials from the Department of Defense recently stated they are looking to raise $500 million to investigate cyber securities, which include cloud computing.


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