Big IT Budgets

One of the biggest IT budgets around is the USA. With more than $3000 billion in spending planned for 2010 complete budget and a deficit of more than $1000 billion (7% of GDP!), the USA is long past looking at ways to cut spending on IT and everything else.

“Reform How Information Technology is Procured and Used. The Federal Government spends tens of billions of dollars on information technology (IT) each year, yet lags behind the private sector’s gains in productivity and improvements in service. A number of structural barriers have prevented the public sector from achieving these gains and closing this technology gap. Through TechStat sessions (intensive reviews of IT projects) and an IT dashboard, which provides a clear window into Federal IT projects bolstering transparency and accountability, OMB has taken an intensive review of IT programs, eliminated ineffective projects, reconfigured others, and has begun targeting IT expenditures more carefully. Over the last 18 months this has reduced future budgeted costs by $3.1 billion. Looking ahead, the Administration will implement a detailed plan to reform Federal IT that focuses on turning around poorly performing IT projects, accelerating agency adoption of commodity IT to save billions in duplicative spending and underperforming projects, working with agencies to reduce the time and effort required to acquire IT, and holding providers of IT goods and services accountable for their performance. As part of this reform, the Administration is reducing the number of data centers by 40 percent by 2015 and moving to a “cloud first” policy of adopting light technologies and shared solutions. By consolidating data centers and leveraging cloud computing the Federal Government will reduce the Nation’s data center footprint, strengthen security, and yield savings in the form of real estate, energy, equipment, and maintenance costs that can then be redirected toward the projects with the greatest benefit to the American taxpayer.”

That sounds good but let us look at the details.

  • Commerce department with $14billion planned spending and $136million cuts in administration of which IT is only a part…
  • Department of state with $62billion planned spending plans to reduce spending on IT by $15million…
  • Treasury with a total outlay of $129billion plans to streamline stuff, including IT to the tune of $200million…

I got tired of looking for this needle in a haystack. The US government seems not to have a line-item for IT and is not serious about cutting expenditures. There is a page on IT expenditures and it comes to a total of $36billion. If 20% of that is for software licences, they could be saving $7 billion by going to FLOSS completely. Instead they seem to be planning to cut nothing or a tiny percentage. They are planning to reduce the number of data centres they operate but that is largely a result of server consolidation, moving problems around instead of solving them.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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10 Responses to Big IT Budgets

  1. Bender says:

    They tried to do the same in Russia to stop the migration to FOSS, Adobe and Microsoft gave the software for free (as i said, it is sometimes cheaper at the beginning to go with the proprietary software but it is the same as with drugs, you often get the first taste for free 😉


    Good point. And for the saved money you can get more PC’s to reach more children. Though Microsoft is basically dumping their software for schools/universities for free. The same as with drugs, first taste is free to get you hooked up for life. And they know that very well thus dumping their proprietary crap on undeveloped minds.

  2. Even if the non-free supplier does not raise prices, the fact that you either have to pay continuing support costs or pay for periodic upgrades forever make it no contest. I built a system for a high school.

    OpenLDAP, Apache and NFS instead of AD on 2003 saved $7000 in licences on installation and a similar amount forever every few years thereafter
    Ubuntu GNU/Linux instead of that other OS on clients saved $15000 on installation and a similar amount every few years forever

    For a school wanting to spend only a few thousand each year for toner that is a huge and important saving. They can use the hardware until it dies and get good performance because they chose FLOSS. If they had gone cap in hand to a salesman for one of M$’s partners they might have obtained a discount or even obtained software for $0 but the addition labour of maintaining the software would have been more expensive even than the licensing fees. You just cannot win playing cards with the devil.

  3. Bender says:

    @Mike Hunt

    Weird logic if you ask me. I have proven that FOSS is cheaper in the long run because you are basically making yourself dependent on one company giving you the solution. They can tell you they want double the money after the contract and by then you are so heavily entrenched with their software but to accept this. FOSS is about having choice because you can always choose another company, you can always port it to cheaper/better solution. You are not dependent on closed software like a heroine addict. Thus i don’t understand your logic at all.

    You have chosen one EXAMPLE from what i said and based everything on that one EXAMPLE as if it proved everything else is bad at FOSS.

    It isn’t matter of price for porting, that was an example of the freedom you have. You may have a good enough solution that you will never ever have to port it but you HAVE the freedom to do it. That is the difference. You aren’t forced to pay the ransom if the company giving you the solution wants more money.

  4. The German situation was that M$ did not supply the templates and spreadsheet functions. The government had to code those anyway. That was part of the lockin. In Munich they have done all that and now just have to replace the OS. Everyone there is using In the Foreign Affairs office they have been using FLOSS with satisfaction for years and saving tons of money.

  5. Mike Hunt says:

    “FOSS wins especially if you have access to source code and aren’t locked in to one and only solution. You can always easily transfer to other solution knowing how to transfer/process old data to new software.”

    You’ve proven my point. Imagine the cost of porting? German government does. It’s more expensive to pay people to first understand the code than using turn key solutions such as what Microsoft offers.

    FOSS costs more when you factor in the time it takes to get it working.

  6. Bender says:

    @Mike Hunt

    FOSS wins especially if you have access to source code and aren’t locked in to one and only solution. You can always easily transfer to other solution knowing how to transfer/process old data to new software. You can’t do this with proprietary software which very often is cheaper at start (to get companies/people locked in) then it gets more expensive as people have no other choice but to carry on. Imagine having thousands and more of proprietary format documents, you can’t even be sure if it will work in 10 or 20 years (crucial for governments for storing data). Hell, concurrent Microsoft Office releases have problems reading each others documents (like 2007 and 2010)!! You can’t store everything in plain text files you know 😉

    So the only way to achieve safety of data is to use for example ODF. In the future there may not be any software reading old format BUT you still know how to read it having documentation for that.

  7. Solutions to what? Problems created by M$ and its partners?

    I have used both commercial software and FLOSS. Commercial software designed to pump money into corporations can be a devil to install and to maintain while FLOSS just slides in and works. In education, a generic distro can do everything we need done. Government will be much the same. Why does FLOSS work for education but not government? Lots of governments run on FLOSS and the USA could as well. DOD, for one, uses a lot of FLOSS. The other departments could as well.

    How is apt-get update;apt-get upgrade requiring more manpower than spending years in a procurement process, getting bids etc.? FLOSS wins hands-down.

  8. Mike Hunt says:

    “they could be saving $7 billion by going to FLOSS completely”

    Oh? You mean like Germany’s failed attempt?

    Don’t forget software price is a very very small part of the equation. Support is the bulk of it and FLOSS/FOSS/OSS costs more in time due to the lack of turn key solutions.

  9. Bender says:

    @Richard Chapman

    Very good point, LSE is supposed to save couple million $ even by buing!! a company. How much were they spending on .NET based service then??

    I know how government anywhere works, if they don’t spend everything by the end of year they would get cuts BUT they always spend money by the end of the year, i suppose it is easy to spend other people’s money. And i guess this is common everywhere, if people are using someone else’s money then they don’t care how much they pay (unless of course they are told to save).

    I guess it would be A LOT cheaper for the government to “build” their own software than pour it to a company that outsources their staff to india and china anyway (Microsoft).

  10. Richard Chapman says:

    I suspect they could write their own in-house software for less than one year’s expenditure on licenses. Similar to what the LSE (I know, they purchased a company instead, so much the better.) did. If the government continues to look at the way things have been done instead of the way things can be done, they’ll continue to throw good money after bad. This is not a technical challenge but a mindset challenge.

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