The Struggle for Granularity: OMB’s Effort to Improve Cloud Budget Reporting

Published: July 25, 2018

Federal Market AnalysisBudgetCloud ComputingData CenterInformation TechnologyOMB

OMB requires increased granularity for agency cloud budgets in its FY 2020 IT budget reporting.

It seems like nearly every year that the Office of Management and Budget, in an effort to get a handle on agency investments, issues new guidance for reporting on information technology. This reporting, of course, includes cloud computing, the guidance for which has changed multiple times since fiscal 2016. Frequently changing reporting standards create chaos for those of us trying to get a sense of the market from the provided data. It becomes an exercise in comparing apples and oranges, and often the final numbers don’t make any sense.

For example, OMB required agencies to report cloud in the fiscal 2016 budget request in categories of “Provisioned Cloud” Development, Modernization, and Enhancement (DME)  and Operations and Management (O&M). Not satisfied with those categories for the fiscal 2017 budget, OMB changed its guidance so that agencies could report cloud in terms of “Deployment Model” (i.e., public, private, hybrid, and community) and “Service Type” (i.e., Infrastructure, Software, or Platform-as-a-Service). This made more sense to industry because it provided insight into the progress agencies were making in cloud adoption. OMB continued this practice for fiscal 2018, but added an “Other Provisioned Services” category that confused everyone with its imprecision. Then the fiscal year 2019 budget request rolled around and we saw yet another round of changes. Now agencies reported only cloud service types by program and a “Cloud Computing Alternatives Evaluation” scale of 1 to 6 that identified the status of the investment in terms of cloud, e.g. using, considering, not considering, cloud considered inappropriate, etc.

OMB’s IT reporting guidance for FY 2020 came out recently and (surprise!) the agency is rolling out more changes in an effort to improve the granularity of the data. One big change is that for FY 2020 agency investments in data centers and cloud will be mandatory. In FY 2019 listing these investments was optional. Reports on these investments are to be placed on the IT Dashboard and kept regularly updated. Cloud Computing Alternatives Evaluation scores will be staying for another year, too, which can be very helpful with identifying the status of programs that agencies are planning to move to the cloud. Cloud service type reporting will also remain for another year, but there will still be no direct reporting on deployment type (see below for indirect reporting of this). Lastly, the “Agency Provisioned IT Services Spending Summary” will be replaced with a category called “Total Other Managed Services (non-cloud),” which should help provide insight into how agencies are using managed services.

Returning to the Data Center and Cloud Standard Investment Reports, which agencies will now be required to submit, the guidance directs them to report at “the most granular level available, such as by data center or cloud procurement. If this level of granularity is not available, Agencies should report at the bureau or Agency level.” Agency spending on cloud, OMB directs, is to be organized into three IT Cost Towers per the Technology Business Management (TBM) Framework – Data Center, Compute, and Storage – based on the following information:

  • Virtual servers running a version of Microsoft's Windows Server or the Linux operating system.
  • Hardware, software, labor, and support services and central storage such as SAN, NAS, and similar technologies for distributed compute infrastructure.
  • Equipment, software, and labor required to run and operate, including mainframe online storage (i.e., attached storage arrays and the associated equipment, software, and labor).

Reporting the context for cloud uses will be connected directly with reporting on data centers (i.e., single tiered data centers, tiered data centers with High Performance Computing capabilities, tiered data centers with a physical location connected to one or more cloud capabilities (i.e., hybrid clouds), data centers that consume data center shared services from another agency, data centers that provide shared services to another agency, and so-called cloud data centers (also known as private sector clouds or public clouds)). Details like IaaS and PaaS will be identifiable via this methodology while “SaaS costs will be captured under the End-User Investment.”

What remains to be seen is if all the data collected will be made publicly available. Will it show up in an IT Cost Tower supplement like OMB provided for FY 2019 or will the data be submitted to the IT Dashboard where reports of it can be downloaded? The reporting process described above sounds complicated vs. simply declaring deployment model and service type by program, but it also reflects the growing complexity of cloud ecosystems at federal agencies. For several years now agencies have “plugged in” cloud where it makes sense, resulting in a jumble of arrangements. OMB’s new guidance hopes to cut through that with increased granularity. Let’s hope they succeed.