HHS budget allocates 1% to cloud computing

The Department of Health and Human Services (HHS) has allocated 1 percent of its overall budget to cloud computing, which has been hailed as an option for significant cost savings.

A new Government Accountability Office report examined the cloud computing services of seven federal agencies, including HHS. The report compared the status of such services in fiscal year 2014 budgets with its previous report in 2012, about three years after the Office of Management and Budget issued the federal Cloud First policy, which requires agencies and departments to implement cloud-based services whenever there is a cost-effective, reliable and secure opportunity to do so.

According to the report, HHS has increased its number of cloud computing services from three in July 2012 to 36 in July 2014 and increased its spending on cloud computing services from $26 million in FY 2012 to $64 million in FY 2014, which corresponded to an increase from 0 percent of its IT budget to 1 percent of its IT budget.

However, the report found that only four of HHS' 36 current cloud computing services reduced costs, for a total savings of $1,190,000.

The two major reasons for that, according to the report, are that the change to such services was intended to improve service, not reduce costs; and in some cases, such services created an additional service or improved quality of service, which created added costs that offset any savings.

The report identified several challenges to implementing cloud computing services, including funding for implementation; having appropriate expertise for acquisition processes; meeting new network infrastructure requirements; meeting federal security requirements; and overcoming cultural barriers.

The agency made several recommendations for HHS in its report, such as assess all IT investmetns for potentially migrating to cloud computing services and establish timelines for IT investments that have not been evaluated for migration to cloud computing services.