Sometimes covering the federal IT community is like a bad roller coaster. The buildup when going up the big hill is exciting and stomach churning. But when the downhill falls flat, you feel a little cheated. That’s the feeling today when it comes to cloud computing. You can’t shake a stick at a conference without someone mentioning the need to the cloud. The crucial role software-, platform-, infrastructure-as-a-service play and will continue to play in the future of federal IT always is hot topic.
But then Deltek’s GovWin puts out a report that is like that flat roller coaster ride. GovWin, a market research firm, looked at preliminary federal procurement data for fiscal 2016 that shows spending on cloud computing hasn’t lived up to its hype.
GovWin found civilian agencies have awarded $75.4 million in cloud contracts in 2016 and the Defense Department, its services and agencies awarded $45.3 million in 2016. We have to take into account that these numbers DO NOT include fourth quarter spending for DoD, as military procurement reporting usually is three months behind. For example, the Army made a $62 million award to IBM for a private cloud toward the end of 2016 that’s not included in GovWin’s numbers.
But let’s look at these preliminary numbers–only $120.7 million contracted for cloud computing in 2016. We know that figure will increase, but not to the $6.7 billion IDC Government Insights predicted in February. Now it’s hard to ensure we are comparing apples to apples here. IDC may be including previously awarded contracts and GovWin may only be looking at new contract awards in 2016.
Still even as a stand along number, $120.7 million is disappointing given all the hype and discussion about cloud. GovWin finds the Air Force made one of the biggest cloud awards in 2016 of $30 million for its Installation Processing Node Pathfinder program, which will become an infrastructure-as-a-service (IaaS) construct for five Air Force Global Strike Command bases, four Air Force Space Command bases and one Air Force in Europe base.
GovWin says the Justice Department made one of the largest civilian agency awards last year of $28 million for the deployment of a virtual desktop infrastructure.
These initial figures also call in question how agencies are categorizing their cloud buys, and whether agencies truly are jumping into the cloud like they say or are giving it lip service.
The General Services Administration’s creation of a cloud special item number (SIN) will help put a finer point on what agencies are buying but that specific information will not come until much later in 2017.
GSA recently put out whitepaper of sorts highlighting several cloud success stories using its contracting vehicles. The case studies range from reducing email systems to one from 14 at the National Oceanic and Atmospheric Administration to NASA saving more than 40 percent per year in operations and maintenance (O&M) costs by putting more than 5 million documents in the cloud to the Homeland Security Department putting 10 public-facing websites in the cloud.
It’s a big surprise that spending seems to be a lot lower than many would’ve have thought nearly six years after the Office of Management and Budget issued the cloud first policy. OMB also recognizes the challenges agencies face and plans to put out additional guidance in the coming weeks.
In fact, the House Oversight and Government Reform Committee asked the Government Accountability Office to look at agency spending on the cloud. In an Oct. 6 letter, lawmakers want GAO to update its 2014 assessment of how agencies are implementing OMB’s cloud-first policy.
A recent contract award by the Veterans Affairs Department is more representative of where most agencies are with cloud and what GAO may end up finding.
VA in late September awarded a $73 million contract to CSRA to be its cloud broker. Under the deal, the company will manage VA’s cloud computing services across multiple vendor offerings. VA said it hopes this new contract will give it a consistent approach to reviewing, securing, managing and procuring cloud services. It also wants CSRA to ensure coordination and integration between cloud service vendors.
“What that’s going to do is look at the need within, the requirements within VA and look at if it can be placed in the cloud, and then use that cloud broker to determine what cloud services will come in,” said Ron Thompson, VA’s principal deputy assistant secretary and principal deputy chief information officer in the Office of Information and Technology, at the AFCEA Bethesda 2016 Health IT day on Oct. 12. “We will focus on hybrid initially, and then look at public for the core IT. We will be focused on our core IT, back-office functions initially, and then working with our research partners to put data out in the cloud as well. Shoring up the base is where the initial priority is and then building out flexibility to interact with our other federal partners as well.”
Thompson said through this contract and the use of the cloud, VA will simplify the way it delivers it services to veterans.
“We have 130 instances of VISTA [VA’s electronic health record] that are unique, that are actually tailored to a lot of locations and a lot of customization is needed so the complexity of securing 130 things versus fewer than 130 is really complex so that adds to how we secure, manage and make sure we are building out toward what the future will look like,” he said. “So we are looking to the cloud to modernize our EHR as we go forward, to modernize all the functionality and capabilities of that EHR moving forward.”
This means a bulk of VA’s spending will happen in the out years. One could only imagine many agencies are on the same flight path to the cloud where after getting through the lowest of the low hanging fruit completed, the more complicated and mission focused efforts are next.