Will Fiscal 2018 Be the Turning Point for Defense Cloud Adoption?

Published: October 11, 2017

Federal Market AnalysisCloud ComputingDEFENSEInformation TechnologyPolicy and Legislation

Four reasons why FY 2018 could be the year that DOD’s cloud adoption busts wide open.

According to data submitted to the Office of Management and Budget toward the end of last calendar year, the Department of Defense anticipates it will spend $170M on cloud computing in fiscal year 2018. This total, while up from the $153M the DOD estimates it spent on cloud computing in FY 2017, represents merely 5.6% in growth from the $161M the DOD estimates it spent on cloud in FY 2016. The overall perception of the DOD’s use of cloud among both industry and Congress is that the department’s adoption rate has not grown as quickly as it should. The question now at the dawn of a new fiscal year is if this slow-moving tendency is about to change. Here are four reasons why FY 2018 could be a turning point in the DOD’s adoption of cloud solutions, resulting in much higher spending to come.


In September 2017, the Office of the Deputy Secretary of Defense published a memorandum on “Accelerating Enterprise Cloud Adoption.” The memo states the Deputy SECDEF’s resolve to push cloud adoption aggressively across the department by taking two major steps. First, the department is creating a Cloud Enterprise Steering Group (CESG) to devise and execute a strategy for accelerating Defense cloud adoption. Second, the CESG’s assessment will result in the creation of one or more DOD-dedicated contract vehicles that will provide solutions tailored to the needs of DOD customers. The extent to which this new CESG effort will overlap current efforts is unclear, but industry should expect it to result in greater attention being devoted to the evaluation of potential cloud solutions by Defense organizations.


The establishment of new cloud-centric contract vehicles by the CESG would be a positive step for commercial partners seeking to do work with the DOD. However, other vehicles are currently in place that should also help accelerate the department’s adoption of cloud. These include the new milCloud 2.0 contract at DISA, the Army’s ACCENT contract vehicle, and the Air Force’s new $1B Cloud Hosted Enterprise Services contract. In addition, organizations all over the DOD have established or are in the process of establishing cloud brokerages to help Defense customers identify viable commercial cloud solutions and partners. Events are even at the point where brokerages are being created for sub-sets of Defense activities. The Navy, for example, recently awarded a $35M contract to CSRA to provide cloud brokerage support specific to R&D activities. The proliferation of brokers will help Defense customers identify viable cloud solutions and streamline the process of contracting for them.


The inability to buy cloud services as utilities has been a big roadblock for Defense customers over the last few years. DISA is now hoping to lift this obstacle by creating “Project Accounts” that will allow DOD organizations to fund cloud services procurement through Defense Working Capital Funds. RADM Nancy Norton, Vice Director of DISA, even announced recently that the cloud capability provided by milCloud 2.0 will be available for purchase through the DWCF. This is a big deal to organizations struggling to use the traditional budgetary process to fund cloud projects.

Windows 10

Last, but not least, before he stepped down as the DOD’s Chief Information Officer, Terry Halvorsen explained that the department’s enterprise transition to Windows 10 was necessary to provide a secure baseline for using cloud services. The deadline for making that transition is rapidly approaching and while it is doubtful that all of the DOD will have made the change by the end of FY 2018 it is likely that significant portions of the department will have completed it. This suggests that by the start of fiscal 2019 the DOD will be poised from a technical perspective to make far greater use of cloud computing than it has to this point.

Nothing is set in stone. The DOD could continue to dally in its adoption of cloud computing due to any number of reasons, including budgetary chaos on Capitol Hill, a massive security breach that gives everyone pause, technical complications, etc. Still, the four developments outlined above provide ample reason for optimism. Those who have already waited years for the DOD to ramp up its adoption of cloud may be about to see their hopes realized.