DISA to industry: Resellers, system integrators need not apply to provide cloud services

Tucked into page 6, second paragraph down on the page of the Defense Information Systems Agency’s new strategic plan is a humdinger of a sentence.

Under the Readiness Through Innovation section of the strategy, DISA seemed to be throwing a heck of a curve at industry when it wrote (my emphasis added):

“We are implementing multiple contracting initiatives to ensure best value in all our programs. One of the programs, Joint Warfighting Cloud Capability (JWCC) seeks to create a multi-vendor acquisition vehicle that the greater DOD can leverage to obtain services directly from commercial cloud service providers. This would eliminate the need for third party resellers, integrators, achieving efficiencies as a result.”

It seemed this 14-word sentence left some in industry flabbergasted and surprised, to say the least.

“Those efficiencies from resellers are small and there isn’t a huge margin there, so there are a lot more places to go to improve contracting, especially IT contracting, that would bear more fruit,” said one industry expert, who requested anonymity because their company does business with DISA. “As for integrators, I’m not sure how this affects them by having to deal directly with cloud service providers. It definitely cuts out the reseller. But DoD still will need someone to build these services and applications. The integrators and resellers have the skillsets that don’t exist in DoD and probably shouldn’t. Industry has skilled engineers to fix problems with technology. Their skillsets are important and valuable to bring in to DoD.”

Other industry experts questioned whether this was just a poor choice of words by DISA or if it’s a major policy change.

Sharon Woods, the director of DISA’s Hosting and Compute Center, offered more details about DISA’s thinking after she spoke at the recent AFCEA DC lunch on cloud computing.

Sharon Woods is the director of the Hosting and Compute Center at DISA.

“Systems integrators have been key partners in our computing and hosting journey, and they will continue to be. So I think that it is important that we continue to leverage their experience as well as the technical capabilities that they bring to bear,” Woods said in an interview. “We have limited resources within the department, and we are working very hard to continue to help our workforce acquire new skills, but the system integrators bring a level of talent and capability to the table that we can never replicate.”

She added the system integrators will partner with the commercial cloud vendors rather than be at the forefront of the cloud implementation effort.

“This is where I think there’s no one-size-fits-all solution. But I think that system integrators play a critical, critical role in making sure that we’re able to implement and adopt hosting and compute on the kind of scale that is necessary for the department,” she said.

But some experts believe DISA doubled down on that strategy when it decided to end its support for the milCloud 2.0 platform, run by a systems integrator, in this case General Dynamics IT.

DISA announced in December that it would pull the plug on milCloud 2.0 in May after having decided it no longer met the Defense Department’s needs.

“DISA is trying to change way they acquire cloud and cloud services. They are trying to become quicker at it,” said another industry executive, who requested anonymity. “They are trying to get the right partnership teams in place, and when they say eliminate integrators, they are trying to eliminate having to keep doing separate contracts. What you will see in this is all of the four companies that are on this, Google, Microsoft, Amazon Web Services and Oracle, will bring partners — and probably more partners than less — so they can do more things under this contract, and that way DISA doesn’t have to go back and ask for those services under new contracts. Also it’s clear that DISA doesn’t know how to go forward on this, based on what we are seeing so far. I applaud their effort, but they don’t know how this is going to work in real life quite yet.”

A former DISA executive, who also requested anonymity, called the language “inartful.”

“I think the bigger message is Sharon Woods [the director of DISA’s Hosting and Compute Center] and folks out of the Defense Digital Service want to contract directly with the cloud service providers and not the integrators. They think typical integrators are slow, cumbersome and want to go directly to CSPs,” the former executive said. “I’m not sure if that is the correct approach or not. Microsoft and AWS always went through resellers because the resellers did work that the CSPs didn’t want to do. The last thing technology companies want do is put [value-added resellers] out of business because they rely on them.”

A DISA spokesperson offered little insights into the organization’s thinking.

“Innovation is not only a major component of DISA’s new strategic plan, it is also central to our recent organization redesign.  We will continue to look to industry to help with innovation and deliver the right capabilities for the Department at best value,” the spokesperson said in an email to Federal News Network. “DISA remains committed to fair and open competition and intends to leverage the acquisition process to ensure receipt of capabilities that offer an optimal combination of cost, technical expertise and capability to the department and taxpayer. There are now, and will continue to be, many opportunities for equipment resellers, integrators and all industry partners to support the department as we continue to innovate and address the current and future battlefield.”

Cloud doesn’t work out of the box

For some industry sources, Woods’ and DISA’s comments rang hollow.

Another industry source, who also requested anonymity, placed the blame on the sentence and new approach in the strategic plan — and the move away from integrators and third-party resellers — squarely on Woods’ shoulders.

“Sharon has said there is no value of system integrators. She has been anti-SIs and proudly put it out there,” said the executive. “But that goes against the way the market works. There are several cloud companies that don’t sell directly to the government and go through VARs and channels. It’s incredibly short-sighted.”

The source added the value of an integrator is because not every technology, cloud or otherwise, works out of the box, so to speak.

“Every technology implementation is different. There is niche and domains that only integrators bring to the table. Microsoft, AWS, Google and Oracle want to have partners for a reason,” the source said. “The Joint All-Domain Command and Control (JADC2) program will have to involve integrators and the cloud. How will DoD do the cloud piece without integrators? What does this no integrator thing really mean for the mission and tactical programs?”

The former DISA executive agreed that integrators and third-party resellers bring expertise to the table that CSPs, the military services and Defense agencies don’t have.

“Integrators bring professional services and specific things that aren’t focused on at the product level, even more with these contracts that have a huge program management requirement, whether it’s security or cost reports or other contract deliverables that happen on a regular basis,” the former executive said. “There are general things that VARs or SIs are set up to do. Now the cloud providers will have to do that and hire staff to manage deliverables versus just focusing on delivering secure, agile cloud services.”

Other experts say DoD is setting the Joint Warfighting Cloud Capability (JWCC) similarly to the intelligence community’s C2E program with multiple cloud providers and integrators as partners.

“DoD doesn’t want to deal with integrators and have to compete the task orders among them. But I think you’d like to have integrators in there,” said the former DISA executive. “If under JWCC, DoD can direct awards to all five companies, then it’s protest proof. JWCC is just the underlying infrastructure, the services PEOs will build on top of it such as those command and control applications or targeting applications.”

Support for milCloud 2.0 mixed

When asked about milCloud 2.0 delivering a similar services as JWCC, Woods said, without discussing specific program names, that there are requirements for on-premise cloud hosted in DoD data centers, as well as in the commercial cloud environment.

“It’s not a binary choice. It’s really important that these things are interoperable and thought about as an ecosystem of capabilities along with the traditional data center footprint,” she said. “All of these programs bring different capabilities to the table, and part of the HACC’s job is to help enable them to work better together. So from a mission owner’s standpoint, they see unified hosting and compute because we are doing the work behind the scenes to help make these capabilities stitch together.”

Not everyone thought ending milCloud 2.0 was a bad idea and a sign of things to come for DoD. Paul Puckett, the director of the Army’s Enterprise Cloud Management Agency, wrote on LinkedIn that DISA should have shut down milCloud 2.0 several years ago.

“We have a REALLY big problem with continuing down a path that was the right decision when it started but the wrong decision now as the world shifts around us. milCloud made sense in 2013, but it doesn’t in 2021,” Puckett wrote. “Those decisions aren’t easy and oftentimes come with high scrutiny. Whether you agree or not, I commend Sharon Woods and [DISA Director] Lt. Gen. [Robert] Skinner for making tough decisions.”

Whether or not the milCloud 2.0 decision is part of the broader DISA strategy, industry experts see the system integrator and reseller language as part of a consistent message coming from industry, and one Skinner made clear at the industry day in October: Industry needs to help DoD do more with what they’ve got and not spend more on tools and capabilities.

“DISA talks about the end user a lot in their strategy and that is a different way of thinking for them,” said one of the industry sources. “Traditionally they thought mission partners needed them more than DISA needed them, but Skinner has done a great job making DISA more customer focused. I think that is the biggest thing that stood out to me about the strategy.”

The big question is how DISA’s strategy document and plans around integrators flow down to the program managers across DoD. Do they pay attention, or do they continue to push forward business as usual?

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