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What Does Deltek's Labor Rate Data Say about the State of the Cloud Market?

Published: August 15, 2018

Federal Market AnalysisCloud ComputingContracting TrendsInformation TechnologyOMBVirtualization

A bull market in federal cloud procurement is starting.

As many of our clients know, Deltek GovWin maintains a database of labor rates bid by companies on major contract vehicles and GSA schedules. These labor rates reflect every type of position across the federal marketplace, including, as I discovered recently, the cloud market. Parsing through this data revealed some interesting information that I’ll share in this week’s post.

A search of the GovWin Labor Rates Database for job descriptions that contain the word “cloud” yields 254 hits spanning fiscal years 2013 to 2018. The position titles and descriptions contain some information one would expect given the search term used. For example:

Cloud Deployment Manager – Minimum 3 years of project related experience. Manages various facets of enterprise cloud deployments, including deployment methodology, installation, configuration, best practices, security architecture, application integration, content management, change management, project risk mitigation. Overall responsibility for cloud deployment projects and assessments including public, private and segmented clouds, as well as hosted solutions.

Or …

Expert Cloud Specialist – Minimum 5 years of project related experience. Subject matter expert on various facets of enterprise cloud infrastructure and systems deployment including deployment, methodology, installation, configuration, best practices, security architecture, application integration, content management, change management, project risk mitigation. Consultant to cloud deployment projects and assessments, including SaaS, IaaS, PaaS.

Other descriptions, meanwhile, do not.

Business Analyst – Familiar with a range of digital/web services and solutions, ideally where open source and cloud technologies and agile development methodologies have been applied. An eye for detail, excellent communication skills, ability to rationalize complex information to make it understandable for others to work, and ability to interrogate reported information and challenge sources where inconsistencies are found.

It is possible to calculate bid cloud positions by fiscal year. The numbers are not massive, but the growth shown suggests upward pressure in the federal cloud market. Growth in percentage terms from FY 2017 to FY 2018 alone is 286%.

Which positions are benefitting the most? The following table shows that practically none of the positions bid in FY 2018 with cloud in the description used the term in FY 2017.

State of the Federal Cloud Market

What do these numbers tell us? To my mind they suggest the following observations:

First, administration priorities matter. It is probably not a coincidence that the rising the number of cloud-related job descriptions aligns with a new presidential administration taking office in FY 2017. The Trump Administration has made no secret of its desire to increase agency cloud adoption as a way of modernizing federal IT infrastructure. This push has, in turn, led to an uptick in agency cloud procurements which vendors have responded to by bidding personnel with experience specifically in cloud-related technologies.

Second, private cloud is still relevant. A lot of the cloud work that agencies require appears to revolve around data center virtualization, suggesting the extent to which agencies are still transforming their data centers into private cloud environments.

Overall, the data suggests growth yet to come. If the percentage growth from FY 2017 to FY 2018 is any indication then industry can expect agency cloud procurements to surge in FY 2019. This would align quite well with Deltek’s long-standing forecast that FY 2019 will be a pivotal year for federal cloud adoption, ushering in the kind of spending that people have been expecting since back when Cloud First was announced.