Analysts Say Increase in Federal Cloud Spending Bodes Well for AWS

Analysts Say Increase in Federal Cloud Spending Bodes Well for AWS
Cloud computing

Adam Selipsky, former president and CEO of Tableau Software, is set to succeed Andy Jassy as CEO of Amazon Web Services in May and will return to AWS as analysts predict further growth for the company driven by a potential increase in federal spending on cloud contracts, the Washington Business Journal reported Tuesday.

“I believe that AWS will increase its footprint by 25% to 30% over the next 12 to 18 months, given the federal opportunities,“ said Dan Ives, a technology, internet and media analyst at investment firm Wedbush Securities. “We believe that this is a golden age within federal cloud.“

The Biden administration's $1.9 trillion COVID-19 relief package includes $2 billion in funds for cybersecurity and information technology transformation programs, including the General Services Administration's Technology Modernization Fund. Ives said he expects IT modernization efforts to drive federal spending on cloud over the next 10 years that could contribute to AWS' growth in the Washington, D.C. area.

Ed Anderson, a vice president and cloud service market analyst for Gartner Research, said he believes the public sector would play a key role in AWS' future growth strategy.

“Clearly public sector and government, specifically, is a very important market segment for AWS,“ Anderson said. “Not only for AWS to continue to be competitive, but also for its future growth. So, no doubt, as it has been, the public sector and government sector will continue to be an area of focus for AWS.“

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