Government struggles with IT projects are no secret, and the area has become a happy hunting ground for tech giants looking to gain work with agencies with seemingly endless to-do lists when it comes to improvement.

The findings come from a survey commissioned by Microsoft and covering 505 medium to large organisations, of which the public sector made up 10 per cent of respondents.

Three-quarters of government organisations report having failed IT projects when it comes to improving citizen experiences and 41 per cent said between 20 and 40 per cent of projects in that area failed.

Government organisations also rated their digital maturity below that of those surveyed in the retail and finance sectors.

"Around 50 per cent of respondents in government said there was a lack of internal knowledge and a lack of internal skills in the market and that was a challenge for them to be able to drive successful projects in the market," Microsoft's business applications director Michael O'Keefe said.

It's a knowledge gap private companies are now seeking to fill, with international giant Microsoft the first global cab off the rank last year to be awarded the ability to hold "protected" level data. According to AusTender, the company has contracts with government agencies worth more than $300 million over the past six years, with most relating to software and related support, but is now making a concerted push into cloud and data services.

But Mr O'Keefe wouldn't comment on whether it was issues within the government IT sector that created work for companies like Microsoft and others.

"At the core Microsoft is providing a platform service for government to be able to leverage to innovate. That's at the core of what we do," Mr O'Keefe said.

"Really it's going to come down to the skills they have in house, and also the partners that we have in the ecosystem that is going to achieve the outcomes they are trying to drive."

Microsoft wasn't the only international player in the "protected" space for long, with Amazon Web Services awarded the same status in January. The company hasn't been in the government game for long, but has already raked in $58 million in government contracts in six years, according to AusTender data.

Amazon Web Services' managing director for the public sector across the Asia Pacific and Japan Peter Moore won't reveal how much Amazon has invested in building data regions in Australia, and said no extra investment was needed to apply for the government's protected status. Instead it was a process of allowing the Cyber Security Centre to verify that the company met the requirements.

According to Mr Moore, the credentials make it easier for government agencies to use the company's applications with confidence.

"It's very typical for a government agency to have not done a great job of separating their highly sensitive data from their data that maybe is a lower sensitivity and that means they really have to treat all of their data with the highest sensitivity," Mr Moore said.

"Because if they're unsure whether sensitive data will be used as part of that application environment then they have to basically use an environment that meets that higher level of classification."

The tech giant rates its involvement with the Bureau of Statistics' postal survey on same-sex marriage in 2017 as one of its major success stories, and has revealed its partners will be making a bid to help the bureau run next year's census.

Mr Moore said he had noticed a marked change in the way Australian government agencies had approached technological change.

"The cultural mindset around new technology [has changed]. Governments typically are more risk averse than other customers, and rightly so," he said.

"So it takes longer for them to embrace these technology shifts. The conversation has moved, however, from 'should we use the cloud?' to 'how do we use the cloud?'."