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Growing citizen expectations, executive mandates, and aging infrastructure are putting increasing pressure on government IT teams to find ways to reduce costs while simultaneously delivering technological advancements faster.

As a result, cloud-related IT spending represents one of the biggest areas of investment for government IT departments. Federal agencies spent more than $6.5 billion on cloud-related projects in fiscal year 2018, a 32% increase year-over-year and the eighth straight year with an increase in spending. Likewise, state agencies continue to make cloud investment a top priority, and more than 86,000 local agencies in the U.S. spend more than 20% of their annual IT budget on cloud services.

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Despite the large investments in cloud-based technologies, these initiatives have lukewarm results to date. Below are three main challenges hindering the progress of government cloud initiatives.

1. On-premises IT infrastructure spending is not slowing down

A good starting point for examining government cloud progress is taking a look at where government IT spends the majority of its budget. In 2018, the U.S. federal government spent an estimated $74 billion of its allocated $95 billion IT budget on the operations and maintenance of existing on-premises infrastructure. While that is a large amount of money to spend on maintenance and support, given the eight straight years of Cloud First initiatives, the expectation would be that on-premises spending would at least be decreasing. However, that is not the case. Per the most recent OMB Report on IT Modernization, U.S. federal government IT spending on legacy, on-premises infrastructure as a percentage of total IT spending actually rose over the past three fiscal years from 68% to 70%.

So given that government agencies are spending more on cloud services than ever before, why are government agencies also continuing to invest so much of their budget on maintaining on-premises infrastructure?

2. Government cloud initiatives are not overnight endeavors

Moving massive amounts of government on-premises data, applications and supporting infrastructure to the cloud can take a number of years to complete.

Take the Data Center Optimization Initiative (DCOI) for example. In 2014, the DCOI tried accelerating cloud adoption by requiring agencies to establish plans to close between 20% to 60% of their data centers by 2018. But per a recently-released OMB report, only two of the 24 agencies participating had established plans to meet their respective targets, with 20 agencies admitting they would not be able to meet the OMBs targets for 2018.

3. Legacy integrations and underlying infrastructure gets in the way

What many government IT departments have found is that on-premises integration has emerged as a major stumbling block in moving to the cloud. As agency IT teams undergo massive cloud migration projects or look to add new cloud-based technologies to improve citizen engagement, these projects are added to the hundreds of other managed integrations on-premises. To support all of these needs, IT teams then have to spend an increasing amount of their limited budget and working hours provisioning and maintaining their on-premises middleware infrastructure to avoid performance bottlenecks.

The challenges with on-premises integration for cloud-based initiatives extend far past just cost and labor. The performance issues and core computing power associated with designing an integration on-premises, connecting it with cloud-based services that harness their own infrastructure and associated costs, followed by the time, energy, and hours of custom coding needed to manage that connection – alongside thousands of other integrations of on-premises and cloud-based services – minimizes the benefits of moving to cloud-based services in the first place.

Having integrations run on-premises also requires a dependency to the underlying on-premises infrastructure needed to support it. As agencies begin to migrate more and more applications to the cloud, keeping on-premises infrastructure up and running to continue managing the integrations on-premises will become more and more of a burden.

So while cloud migration does require considerable time and resources, it’s nothing compared to what it takes to keep the status quo running on-premises. Spending more resources on managing the maintenance and ongoing support of older, on-premises infrastructure (and the underlying integration needs) leads to less capacity for adopting new cloud applications, thus making it harder for agencies to complete their cloud initiatives.

But there is a better way: cloud-based integration solutions, also known as iPaaS, are replacing more and more on-premises integration solutions, which we will dive into in our next blog post. To go further in-depth into government cloud adoption challenges and solutions, read our whitepaper, Cloud-based integration for FedRAMP compliance.

Kevin Flanagan contributed to this blog.