New Analysis From Apptio Finds U.S. Federal Agencies Spending $858 Million On Cloud, Less Than 2 Percent Of All Tech Spending

BELLEVUE, Wash., March 20, 2019 /PRNewswire/ -- Apptio, software that fuels digital transformation, introduces Apptio® Federal Insights, a free application designed to help federal agency leaders align IT resources, reduce risk and drive value to maximize mission objectives. Apptio analyzed publicly available IT spending data from approximately 90 federal agencies totaling more than $74 billion in fiscal year 2018, finding less than two percent ($858 million) was dedicated to the cloud. This level of spending is a sharp contrast to private sector organizations who are allocating up to 30 percent of their budget to cloud computing.

In the move to modernize, many agencies are embracing cloud infrastructure and SaaS solutions to quickly provide valuable technology services to their mission constituents. Shifting from legacy, on-premises applications and storage is changing the way federal agencies are investing. According to Apptio's analysis, key trends in federal technology spending include:

• Federal agency cloud spending is well below private-sector averages: According to the 2018 IDG Cloud Computing study, private sector companies allocated 30 percent of IT budgets to the cloud in 2018. Based on Apptio's analysis, spending in federal agencies falls far below that at average, representing two percent of all costs. The Small Business Administration is the highest agency spender on cloud at 7% of their budget, while the Department of Energy and Labor are coming in at only 0.1% of spend.
• Vendors are driving technology spending: The Apptio analysis also reveals that more than $2.5 billion of the technology spend is tied to specific IT vendors. The highest vendor contract in 2018 was awarded to Insight Public Sector, totaling more than $624 million across 35 agencies with services provided by multiple vendors, including:
• $425.1 million to Microsoft
• $1.8 million to Adobe
• $1.6 million to Apple
• Additionally, Microsoft alone accounts for almost $1.3 billion across all contracts, with $113 million dedicated to Adobe.

Designed specifically for IT and finance leaders at federal agencies, Apptio Federal Insights applies machine-learning to publicly available data sets including the Federal Procurement Data System sourced through USASpending.Gov, FedScope and the Federal IT Dashboard. Apptio's analysis delivers a 360-degree financial view of an agency's historic technology spending. With this insight, agency leaders are armed with:

• Increased visibility: A unified view of consolidated vendor spend, including cloud providers and applications, or shadow IT spend along with benchmarks across different, disparate federal agencies.
• Data-driven decisions: Uncover defensible insights to understand where IT dollars are truly being spent. With these insights, federal agencies can then retire applications and reallocate spend to other investments like cloud.
• Automated solutions: Realize the value of an automated Technology Business Management (TBM) solution backed by the industry's only standard taxonomy. Users can also simplify compliance with the Office of Management and Budget's request for TBM adoption by 2019.
• Mission success: Avoid the risk of duplication and waste by aligning resources to mission goals and modernize the approach to IT so the agency can deliver services to citizens and organizations more efficiently and cost-effectively.

"Apptio's decision to build a readily accessible free application, using publicly available data, will give federal agencies tremendous insight into where their IT dollars are being spent," said Adam Mcllwain, Senior Manager of SIE Consulting Group. "As a strong proponent of the TBM taxonomy, SIE Consulting Group has consistently fought to help our federal customers modernize their technology infrastructures. Using sophisticated machine learning capabilities, Apptio's investment in this analytics tool will kickstart agencies pursing TBM implementation and accelerate the tremendous benefits of achieving robust cost transparency."

"Because many agencies are using tools and processes that are not purpose-built to manage the complexity of IT, there is an excessive amount of unvalidated data throughout federal agencies," said Bob Carter, VP of Public Sector and Operations at Apptio. "That is why it is crucial for agencies to apply a set of foundational rules through TBM and Apptio to gain insights, validate data and support their digital transformation journey while making strategic business decisions."

Apptio is the leading provider of Technology Business Management (TBM) software that automates the collection and analysis of technology spending data across the public and private sector. Powered by machine-learning, Apptio's software provides visibility and actionable insights so that federal finance and technology professionals can make informed decisions about key strategic investments.  Apptio Federal Insights is now available as a free application for employees of federal agencies through select partners. For more information, please visit: https://info.apptio.com/Federalinsights

About Apptio:

Apptio fuels digital business transformation. Technology leaders use Apptio's machine learning to analyze and plan their technology spend so they can invest in products that increase the speed of business and deliver innovation. With Apptio, they translate raw costs, utilization, and billing data into business-centric views that help their organization optimize spending, plan strategically, and drive digital strategy that funds growth of the business. Technology leaders can gather instant recommendations that result in up to 30% saving on cloud services. For more information, please visit www.Apptio.com.

© 2019 Apptio, Inc. All rights reserved. Trademarks and logos are the property of their respective owners.

Media Contact:

Sarah Bergstrom-Leach
Apptio
[email protected]

SOURCE Apptio

Related Links

https://www.apptio.com/

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