Cloud projects eat into shared services

NOTE: This first appeared on

Cloud and better business management practices are biting into the way federal agencies buy and use their IT, according to the Professional Services Council's newest research into how federal agencies spend their budgets.

PSC's 2019 Vision Forecast, released Oct. 29, shows agencies moving away from traditional shared services toward provisioned cloud-enabled IT services. PSC's annual forecast queries hundreds of federal technology and acquisition officials about how they see technology and spending.

Steve Vetter, one of PSC's program leads for IT budget and management research for the Vision report, said the research shows traditional shared services, such as those provided under the General Services Administration's Unified Shared Services Management operations, saw a 17% decline in fiscal 2019.

Agencies are supplanting those services, according to Vetter and co-lead Greg Lobbin, with "provisioned IT" services such as software-, infrastructure- and platform-as-a-service offerings (SaaS, IaaS, PaaS).

The last year, they said, has seen a significant increase in cloud services including IaaS, PaaS and SaaS. That growth, said Vetter, could be accounted for by the increasing detail in categorization driven by the President's Management Agenda.

However, spending on cloud services, which increased 58% among agencies in 2019, shows that move is also driven by the federal government's "Cloud First" and "Cloud Smart" initiatives that emphasize the technology.

"Cloud is a form of shared services," said Vetter, "but provisioned IT goes beyond shared services." Provisioned IT, he said, now makes up 18% of federal services.

The federal government, according to Vetter and Lobbin, is acting more and more like a commercial enterprise in its use of IT, basing buying decisions increasingly on business cases surrounding the technology that justify spending.

Technology Business Management methodology and data standards to measure IT costs and create a cross-agency framework for understanding IT spending are having a "stabilizing effect" on civilian IT spending, according to the PSC research, said Vetter.

That sunny take on IT spending however, could be shadowed by a global and federal economic environment that shows signs of instability, PSC President and CEO David Berteau said during the conference call.

The federal budget picture, he said, remains on shifting ground, with continuing resolutions, a possible lapse in appropriations and a partial shutdown. That injects uncertainty into how agencies will plan and buy IT and services, he said.

As happened in 2018, in 2019, agencies haven't spent all their appropriated funds, according to Berteau. A chronic shortage of federal contracting officers and ongoing overarching political battles could also have significant impact on agency spending, he said.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at or follow him on Twitter at @MRockwell4.

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