US national budget looks to cloud and consolidation to hold down IT costs

President Obama's fiscal 2012 budget proposal keeps IT spending almost flat compared to fiscal 2010 mostly due to the consolidation of data centres and a shift to cloud computing systems.

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With Congress in the mood to cut spending, the federal budget proposed by President Barack Obama relies heavily on cloud computing and data centre consolidation to keep IT costs under control.

The Obama administration's 2012 federal budget proposal sets aside $79.5 billion for IT spending for fiscal 2012, which begins 1 October.

This proposal would increase IT spending by 1.9% compared to fiscal 2010. The current fiscal year's IT spending remains a work in progress as the federal government operates under Continuing Resolutions. The latest resolution gives it enough money to operate through March 4.

The administration says it's able to keep IT spending essentially flat at least partly because of projected savings of $3 billion-plus from IT consolidation and a planned shift to cloud computing technologies.

The White House has been setting the new IT direction over the past year, and in recent months started putting hard numbers to the plan.

In December, the administration announced plans to close more than 800 of the government's 2,100 data centers by 2015.

Earlier this month, federal CIO Vivek Kundra released a report outlining a "cloud first" strategy for federal agencies.

Kundra estimates that the federal government could shift some $20 billion of IT spending to cloud computing platforms. His report said the government "will be able to reduce our data center infrastructure expenditure by approximately 30%" through cloud computing.

Ray Bjorklund, a vice president at consulting firm Federal Sources, questioned Kundra's savings estimate, noting that it is based on commercial sector studies that he is skeptical "will really apply to the government."

Commercial businesses can act quickly on IT changes, said Bjorklund, but government agencies have statutory requirements and are so complex that "trying to wave your wand and say we are going to achieve 30% savings is not that simple."

Bjorklund added that data center consolidation is a potentially long process, and he wondered whether the government "IT workforce is ready, willing, capable and able execute on that, to meet that timeline."

The federal budget discusses investment in "light technologies," which Deniece Peterson, an analyst at government market research firm Input in Reston, Va., said can be essentially defined as cloud services, but may include virtualization and Services-Oriented Architectures that are also part of an underlying cloud foundation.

Peterson also analysed the budget in a blog post. Instead of offering a significant amount of new funding for new technologies, this is a budget "that requires reprioritization and reprogramming of dollars," said Peterson.

Kundra has set the priorities and by establishing cloud as a top direction. "Other less-critical programs will either see cuts, smaller growth than anticipated or be simply put on the shelf to be addressed when those savings are eventually reinvested in projects with clearer, more defined ROI," said Peterson.

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