Cloud Consolidation & AI: The Future of Federal IT

Original Broadcast 3/23/25

Presented by Booz Allen

The federal government is entering a new phase of cloud adoption, with agencies leveraging multi-cloud strategies and artificial intelligence (AI) to enhance IT modernization and mission-critical operations. Richard Crowe, Civil Sector President at Booz Allen, recently joined Fed Gov Today with Francis Rose to discuss the factors driving cloud evolution across government and how AI is shaping the next generation of IT operations. Crowe highlighted key lessons learned from the past decade of cloud adoption, the role of AI in modernizing legacy systems, and the growing importance of data standardization to ensure seamless interoperability across agencies.

A Decade of Cloud Evolution in Government

Over the past ten years, federal agencies have progressively moved from on-premise data centers to cloud-based solutions. This transition has enabled agencies to improve agility, efficiency, and scalability while reducing the long-term costs associated with hardware procurement and maintenance. According to Crowe, early cloud adoption efforts in government largely mirrored those in the commercial sector but often lacked a coordinated, enterprise-wide approach.

“We're about 10 years into adopting cloud in the federal space, and there are now well-established best practices that agencies can leverage to optimize their cloud environments,” Crowe said. “What we’re seeing today is an evolution toward multi-cloud strategies, where agencies are using multiple cloud providers to increase resilience and flexibility.”

Multi-cloud adoption has become a critical component of IT modernization efforts, enabling agencies to distribute workloads across different platforms, optimize costs, and reduce vendor lock-in. Crowe emphasized that federal agencies are increasingly looking at cloud as an enabler of mission success, rather than just an IT infrastructure decision.

“There’s been a real shift in mindset—cloud is no longer just about IT, it’s about how we deliver mission services effectively,” he noted. “Agencies are learning from both government and commercial best practices to accelerate their modernization efforts.”

AI’s Role in IT Modernization

As cloud adoption matures, agencies are now turning to AI to further streamline IT modernization. Crowe highlighted three key ways AI is making an impact:

1. Modernizing Legacy Systems – AI is being used to analyze and reverse-engineer decades-old code, making it easier for agencies to transition legacy applications to modern cloud environments. By automating the code refactoring process, AI is accelerating modernization efforts and reducing manual labor costs.

2. Enhancing IT Operations – AI is also transforming IT service management by optimizing cloud deployments and automating system monitoring. AI-powered tools can predict potential failures, detect anomalies, and enhance security protocols, ensuring greater operational efficiency and reliability.

3. Improving Decision-Making – AI-driven analytics enable agencies to process large volumes of data in real time, helping mission leaders make informed decisions faster. By applying AI to structured and unstructured data sources, agencies can gain deeper insights into operational trends, risks, and opportunities.

“AI is really driving modernization in a number of ways,” Crowe said. “From automating legacy code updates to improving IT operations and data-driven decision-making, we’re seeing AI become an essential tool for federal agencies.”

However, Crowe noted that while AI holds great promise, agencies must ensure they have the right data foundations in place to fully realize its benefits.

The Need for Data Standardization

One of the biggest challenges in government IT modernization is the lack of standardized data structures across agencies. Without a common framework for data management, AI and cloud-based applications struggle to deliver the full benefits of interoperability.

Crowe stressed that as agencies continue their cloud journey, they must prioritize data standardization to enable seamless integration between systems.

“Standardized data is critical to unlocking the full potential of AI and cloud,” he said. “Without it, you’re going to run into major challenges when trying to share information across agencies or leverage AI-driven insights.”

The push for better data management is particularly relevant as government missions become more interconnected. Agencies need to exchange data efficiently to support national security, healthcare, finance, and other critical operations. Crowe pointed out that many federal agencies are now adopting commercial off-the-shelf (COTS) solutions to help address these data challenges.

“We’re seeing more agencies embrace COTS platforms for data management because they provide out-of-the-box capabilities that align with industry best practices,” Crowe explained. “This approach allows agencies to modernize faster while ensuring compatibility with existing cloud environments.”

Preparing for the Next Phase of Cloud & AI

Looking ahead, Crowe predicts that the convergence of cloud, AI, and data standardization will continue to drive the next phase of federal IT transformation. As agencies become more reliant on digital infrastructure, they must ensure they have the right governance, security, and workforce strategies in place to support ongoing modernization efforts.

He emphasized that agencies must focus on three key priorities moving forward:

1. Developing a Cloud & AI Strategy – Agencies must align their cloud and AI initiatives with mission objectives, ensuring that technology investments deliver tangible benefits.
2. Strengthening Cybersecurity – As cloud and AI adoption increase, so do cyber threats. Agencies must implement Zero Trust principles and advanced threat detection mechanisms.
3. Upskilling the Workforce – The rapid evolution of cloud and AI requires agencies to invest in workforce development, ensuring employees have the necessary skills to manage and deploy emerging technologies.

“The future of federal IT is all about integration—cloud, AI, and data must work together seamlessly to drive mission success,” Crowe concluded. “Agencies that prioritize modernization now will be best positioned to navigate the challenges and opportunities ahead.”

With multi-cloud adoption accelerating, AI driving modernization, and data standardization becoming a top priority, the federal government is entering an era of unprecedented technological transformation. As agencies continue their digital journey, the lessons shared by leaders like Richard Crowe will be instrumental in shaping the future of government IT.