Report: DOD IT spending headed for a slight increase

Despite an austere budget situation over the past few years, Defense Department IT spending is actually headed for a slight uptick in fiscal 2016, according to a forecast from market researcher IDC Government Insights.

In its five-year forecast, covering 2015 through 2019, IDC projects that DOD will spend about $30.5 billion on IT in 2016. While that represents only a 1.6 percent increase over this year, it will reverse a trend that saw the department’s IT spending drop 14.4 percent over the past three years, the report says. DOD’s IT budget was a little more than $35 billion in fiscal 2012; this year, spending projects to be about $29.9 billion.

And the report says IT spending will remain “relatively healthy” through 2019, with a compound annual growth rate of about 0.5 percent.

A big driver of the projected growth is with defense-wide services, resources that are available to all the military services and other DOD components. That reflects DOD’s focus on developing the Joint Information Environment, which is intended to accommodate the U.S. military as well as coalition partners, and other cross-department efforts.

As for each of the services, IDC said IT spending by the Army and Air Force is expected to drop slightly over that five-year span, while the Navy will see a very light increase.

"The increases show slightly more spending targeted to cloud solutions and more spending targeted to security improvements," said Shawn P. McCarthy, research director for IDC Government Insights. "This trend is expected to increase for the next few years. Beyond 2017, we don't expect to see growth to be quite as robust as what we have seen between 2014 and the proposed 2016 budget year for DOD agencies."