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Cloud computing spending in Fiscal Year (FY) 2025 could reach $8.3bn for federal civilian agencies.

According to research published by government contract database firm GovWin IQ as part of its Federal Market Analysis, the total budgets for cloud computing technology have almost doubled since 2020.

Actual cloud spending in 2020 reached $4.4bn, while the request budget for 2025 is as much as $8.3bn.

A notable jump occurred between FY2023 and 2024. Previously, budgets had been growing around $400 million per year, however, in this period it jumped by $2.2bn.

GovWin IQ noted that federal civilian agencies stopped reporting on their spend on cloud computing "several years ago," but that when still published, the results tended to be "wildly inconsistent" with the verified cloud contract spending data that the Federal Market Analysis would find.

To get around this lack of transparency, GovWin IQ ran all of its "cloud market keywords" against the program descriptions listed in the IT portfolio which can be accessed via the government's IT Dashboard. Through this process, those civilian agency programs using cloud technology or planning to in the next year can be viewed.

Across FY 2023 to 2025, the civilian agency with the largest cloud computing budget was the Treasury, at $5.054bn, followed by the Department of Health and Human Services (HHS) at $2.686bn. Of the ten agencies shared in the research, the Department of Veterans Affairs had the smallest budget at $718m.

GovWin IQ noted this smaller budget: "The VA has been among the civilian agencies spending the most on cloud computing annually for the last several years, and yet here was the VA coming in tenth compared to smaller agencies such as the Social Security Administration."

GovWin suggested that this demonstrates the limitations in the reported data by federal agencies, and that there could be "dozens of VA investments" that use cloud technology yet fail to mention the cloud or other solutions known to be cloud-based, thus not being shown in the results.

Similarly, GovWin IQ points to the Treasury leading the pack as a surprising outcome, as the Treasury's cloud journey has been "long and slow." This has changed in the last couple of years, according to GovWin IQ.

"The Treasury ramped up its budget for cloud services from $515m in FY 2023 to $2.2B in FY 2024," noted the report.

"This jump partially explains the rise in the total market from FY 2023 to 2024. In FY 2025, the Treasury then requested an additional $2.4bn, illustrating how it is making a full-on enterprise push into the cloud."

Overall, despite gaps in reporting, the data suggests massive moves toward the cloud across federal agencies.

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Federal IT Budget for cloud computing hits $8.3bn in FY 2025 - report - DatacenterDynamics