FEATURE
Hybrid cloud modernisation accelerates in US public sector as agencies battle budget and workforce constraints
State, local and education agencies in the US are rapidly adopting hybrid cloud managed services to replace costly outdated systems, using AI, automation and data-driven strategies to improve citizen services despite ongoing fiscal and talent shortages, ISG research finds.
Across the US public sector, agencies are ramping up hybrid cloud adoption to address a pressing problem: outdated, costly legacy systems that drain budgets and hamper service delivery. According to the 2025 ISG Provider Lens Private / Hybrid Cloud – Data Center Services report for the US Public Sector, state, local and education( SLED) organisations are focusing their technology spending on modernisation, cybersecurity and hybrid cloud infrastructure, even as overall IT market growth slows due to limited resources and political shifts at the federal level.
The report finds that nearly 90 % of SLED agencies are expected to embrace hybrid cloud models, a move driven by the urgent need for measurable modernisation outcomes supported by AI-powered tools and automation.
“ US public agencies are looking for IT modernisation projects with measurable outcomes, provided
24 INTELLIGENT GOV. TECH www. intelligentgov. tech.