Commercial or custom? One of the oldest, running questions in government procurement, it continues to vex agencies whether to develop their own applications or use something commercial that’s already out there. Procurement law and policy, at least on paper, favor COTS — commercial off-the-shelf.

Yet in one of the applications most central to their missions, the Defense and Veterans Affairs departments have taken diametrically opposite strategies. I’m talking about electronic health records.

As Jared Serbu has been reporting, the 92nd Medical Group of the Air Force Medical Service installed the first instance of a commercial product, which the DoD medical establishment has dubbed MHS Genesis. The product comes from Cerner Corp. and Henry Schein Inc.

Veterans Affairs, with decades of investment in its well-regarded Vista, developed in-house, has said for several years it would not follow DoD but instead continue with some new form of Vista but work with DoD toward interoperability of the two systems.

But from what a VA official said at the Government Information Technology Executive Conference (GITEC) in Annapolis, Maryland, earlier this week, I got the distinct impression VA’s strategy is about to change. I mentioned this in my column the other day in connection with VA’s thinking about its COBOL applications. Acting Chief Information Officer Rob Thomas said, in response to a question, that a decision on whether to stick with that policy could be coming from the highest levels of the VA within a couple of months.

VA has less institutional bias against COTS than perhaps it did years ago. Thomas, as I reported, also said VA is rolling out a commercial scheduling system in Boise, Idaho, as the first step toward replacing the old system that helped get the agency in so much trouble with Congress and its own veteran constituents.

In many ways, the policy for using cloud service providers makes it easier for agencies to begin replacing legacy systems with commercial applications. Nearly every business function required by organizations in government and most vertical industries is available from a cloud provider; more precisely, from vendors whose software is increasingly offered as a cloud hosted solution and priced per-user or per-something, rather than a product you buy, install on your servers and worry forever about license management, updates and maintenance.

In fact, some legacy products are going cloud-only. I have a micro-business on the side. For years the chief financial officer (my wife) has used Quickbooks. It runs on one of our Macs. Now we’re informed we can buy the last update the publisher will offer. After that, Quickbooks becomes a cloud-hosted, monthly subscription service. That will be more expensive, but it takes away the need for worrying about backups. And we can do billing and reports from any computer.

For large organizations like federal agencies the economics will be different. Switching from license purchases to subscriptions, they’ll have to calculate how that offsets the costs for hosting in their own data centers, and operating and maintaining with their own people. Even if it’s a wash, think of what you could re-deploy your IT people to do.

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