The biz has also just signed a deal to spend $400m a year on Google’s cloud hosting over the next five years – that’s $2bn in total for the Gmail giant.
That’s an amazing chunk of spend for a hats on cats business. Hopefully, Ben Thompson’s theories that Snapchat is the new TV pan out.
There is a lot of uncertainty in the air,” said one consultant close to the Office of Management and Budget’s IT efficiency initiatives who asked not to be identified. “The whole IT industry and federal IT operations are in a wait-and-see holding pattern,” he said, anticipating official word on key federal IT initiatives and leadership positions.
In my amateur analysis of Trump’s effect on IT spend, it seems like there’s three options:
- More of the same with big contractors and vendors, just wrapped up in myths of change.
- Complete shut down of everything with respect to growth; they just stop spending and let government IT age.
- Start working with new government contractors and doing things differently; the “Space X” option.
Who knows what’ll happen?
Boeing and Lockheed were already worried about their costs long before the election. If I were the United Space Alliance, I would be even more terrified of the danger of losing government business now. And those of us in federal IT need to realize that our time may be around the corner.
As we discussed in the 2017 predictions show last month, the Trump adminstration is clearly not reliable in it’s agenda or principals for any reliable, let alone logical, predictions. Cutting spending in favor of “non-traditional” options, though, seems like something they’d goof into.
The big takeaway is that small increases in IT budgets are the new normal. Unlike previous recoveries, we have not seen a large jump in IT spending over the past five years. So if a CIO is only seeing a two or three percent increase this year, he or she should understand that is pretty much in line with other companies.
See more guidance charts on IT priorities, n=190.
$2.3T estimated for global IT spend in 2016, with the US seeing the most growth, 1% in Western Europe, and growth slowdowns in India and China.
Source: 2016: the year IT sales will go sdrawkcaB • The Register
“In addition, the government plans to increase PaaS spending from $227.1 million in FY15 to $231.3 million [in FY16].”
We’re still in a phase where categorization causes weird slices of spend like this, but there you have it. More figures on “cloud” spending in the piece.
Source: IDC: Federal government seeing cloud spending push