This article has been updated from the original, published on October 10, 2017 to reflect new events, conditions or research.
Delivering services efficiently and achieving cost savings are the top two drivers of cloud adoption in government. Gartner foresees double-digit growth in government use of public cloud services, with spending forecast to grow on average 17.1% per year through 2021.
Across all industries, companies spend an average of 20.4% of their IT budgets on cloud. Cloud use by government organizations varies depending on whether they operate at a national, state/province or local level. Local governments spend 20.6% of their IT budgets on cloud, and national governments spend 22%.
“The key to successfully implementing cloud in government is accounting for the unique technical, organizational, procedural and regulatory issues of individual organizations,” says Neville Cannon, research director at Gartner. “For example, national governments typically see cloud as a long-term pathway to strategic IT modernization, whereas local and regional governments tend to pursue the immediate tactical benefits of innovation and cost savings.”
Data sovereignty is often still considered a mandatory requirement.
Arguably, local governments are better positioned to benefit from increased spending on cloud as shrinking budgets, changing demographics and rising expectations for digital engagement place them at the apex of the need for transformation.
Public or private?
While public cloud growth is healthy in government, major concerns remain that are holding back faster adoption. The top three objections to public cloud in government are security or privacy issues, lack of features and concerns about vendor lock-in.
This leads Gartner to expect that governments will implement private cloud at twice the rate of public cloud through 2021, despite private cloud not delivering the same benefits in scale, functionality, cost savings or agility as public cloud.
Government private cloud is the new legacy.
Much of what governments report as “private cloud” is better categorized as advanced virtualization or outsourced IT infrastructure. These may still be excellent environments for running certain workloads, but are unlikely to have all the benefits of a true private cloud. The gap between what government private clouds can realistically achieve and functionality delivered by the public cloud is growing.
“Government private cloud is the new legacy,” says Cannon.
A Gartner survey revealed that less than 5% of private cloud environments in government actually have the full characteristics of cloud. “What this highlights is that there are political benefits to talking about moving to cloud, even where that transition is not taking place in a meaningful way,” explains Cannon.
“Poor or incomplete cloud implementations have the potential to produce the worst of both worlds, leaving government employees and citizens poorly served in the end.”
Where is data stored?
Data sovereignty is often still considered a mandatory requirement. Many governments remain uneasy or unwilling to store data outside of their borders, with some well-publicized examples. Australia canceled a government contract with a supplier when it discovered the Italian company was processing data in an offshore cloud. The U.K. could have legally used cloud services in Dublin or Amsterdam to store Ministry of Defence data, but it waited until the provider was up and running locally.
As the market progresses and new functionality increasingly becomes available only in the cloud, those governments that refuse to use cloud may see their capabilities marginalized.