Office 365 arrives to flat IT spending
Overall IT spending barely rises above last year
Computerworld - Microsoft is pitching its cloud-based Office 365 as a less costly alternative to on-premises software, assuming IT managers can find money in their budgets for a migration.
Private-sector IT spending is flat year over year in the U.S., and the rate of growth in public-sector tech spending is declining, according to two separate studies.
IDC this week reported that it expects IT spending, including private- and public-sector spending in the U.S., to increase 5.6% this year, following last year's 5.5% increase. But the rate of growth in public-sector IT spending is declining. Last year, public-sector spending increased 5.46%, but this year it is forecast to rise only 3.8%, said Ted Dangson, an analyst at IDC.
Google has taken advantage of the public sector's interest in the cloud. The company recently won a contract to provide its hosted Google Apps to the Wyoming state government. State officials have said they expect to save more than a $1 million a year by rolling Google Apps out to 10,000 users.
Microsoft said it expects Office 365 adopters to cut costs anywhere from 50% to 200%, depending on a wide range of factors -- including the cost of operating a data center versus tapping into the vendor's cloud.
But limited budgets may still make the move hard.
"The challenge is going to be that moving to the cloud does require some upfront money," said Susie Adams, CTO of Microsoft's federal government business unit, which handles sales to government. "You've got to migrate off existing systems into the cloud to realize those cost savings," she said.
The public sector represents a sizable share of overall U.S. IT spending. In 2010, the private sector accounted for nearly $391 billion in IT spending, and the public sector accounted for about $91 billion.
Computer Economics, in its annual IT Spending and Staffing Benchmark study, said that it expects public-sector IT operation spending, which doesn't include capital spending, to decline by 3% this year, meaning it would be the only sector in which such spending declined. IT spending in the insurance industry, in contrast, is expected to grow by 5%.
Government is not cutting-edge when it comes to IT, "but they are certainly a big chunk of the economy, and they are laying off workers and reducing their capital and operational spending," said John Longwell, vice president of research at Computer Economics.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is email@example.com.
Read more about Government IT in Computerworld's Government IT Topic Center.
- Google I/O 2013's Coolest Products and Services
- 10 Star Trek Technologies That are Almost Here
- 19 Generations of Computer Programmers
- 25 Must-Have Technologies for SMBs
- A walking tour: 33 questions to ask about your company's security
- 15 social media scams
- The 7 elements of a successful security awareness program
- IT Certification Study Tips
- Register for this Computerworld Insider Study Tip guide and gain access to hundreds of premium content articles, cheat sheets, product reviews and more.
- Federal IT Innovation Caught in a Catch-22
- Fed resources shoring up old infrastructure, holding back new technologies.
- Harness IT -- An Introduction to Business Intelligence Solutions
- Learn the key selection criteria required to provide your organization with the capability to address structured data, unstructured data and mobile demands so...
- Business Intelligence Shows its Smarts
- Today's Business Intelligence (BI) tools provide a new way to think about data with self-service capabilities and user-friendly analytics that can be used...
- Proactive Planning for Big Data
- Big data is less about the terabytes and more about the query tools and business intelligence needed to make sense of massive amounts...
- Inquiry Spotlight: Consumer-Facing Identity
- The challenges of consumer-facing identity management, access management, and authentication differ in ways subtle and dramatic from those of the employee-facing variety. All Government IT White Papers
- Becoming An Analytics Driven Organization
- Join us on Tuesday, June 18, 2013, 11:00 AM EDT and learn how your agency can create an analytics culture that will enable...
- 3 Reasons Why Sepaton is the World's Fastest Backup Solution
- Leading analyst, Storage Switzerland learns how Sepaton backs up and deduplicates massive data volumes while maintaining the industry's fastest performance - all in...
- Enterprise File Sharing: All You Need to Know
- Security. Scalability. Control. These are just some of the many benefits of enterprise cloud file-sharing that you'll discover in this KnowledgeVault, packed with...
- Bridging HTTP and FTP with FileXpress Internet Server
- What if you could take an FTP server on your internal network, and allow external users (partners or customers) to securely access it...
- MFT and FileXpress - An Overview
- Business users and applications exchange files on a regular basis. File transfer is a core part of the flow of business activity. All Government IT Webcasts