Industry experts expect the federal government will move more aggressively to buying software as a service during the next two years, but agency officials warned that there are huge security and culture questions that need to be answered first.

Software as a service is a burgeoning trend in the commercial marketplace, but agencies have yet to take full advantage of it, experts say.

The concept of software as a service is not necessarily new — it is similar to managed services or application service provider offerings. In this case, users buy access to a specific platform used by many different companies or agencies at the same time. Users also buy software through a subscription fee or each time they use it as opposed to buying the license and maintenance.

“Software as a service is growing in acceptance, but it is slow,” said Richard Colven, vice president of Input at the Software As A Service conference sponsored by the Software and Information Industry Association, Input and the Information Technology Association of America in Washington. “The consensus is that this is something agencies are moving toward, but there is a huge educational challenge because many people don’t understand the fine print.”

Colven said Input surveyed 66 federal executives and found many are hesitant to move to this model immediately, but see it happening in time.

Colven and others said examples of software as a service in government include human resource and financial management Line of Business shared service providers.

“We are familiar with hosted services such as EDS and the Navy-Marine Corps Intranet,” said Curt Kolcun, Microsoft’s vice president for the federal division. “There also are data centers and other services running in the cloud. The platform on the Internet must be the same one the end customer or host partner runs.”

Colven said Input estimates that agencies will spend about $34 million on software as a service in fiscal 2008, but spending will increase to $74 million in 2009 and $95 million in 2010.