As-a-Service Departmental Needs Assessment

Cloud solutions have recently become an increasingly popular strategy for the Federal Government and that trend doesn’t seem to be changing soon. More and more agencies are adopting the Cloud mantra and undergoing various degrees of migration to the platform. But which agencies are seeing success with the change and which ones are facing challenges? There are many things to consider but first is an understanding of what Cloud computing offers. There are varying degrees of ownership that can be achieved through Cloud computing which are highlighted in the three main categories of Cloud solutions:

• Infrastructure as a Service (IaaS): Vendors only provide the Infrastructure and Hardware
• Platform as a Service (PaaS): Vendors provide hosting capabilities and infrastructure management
• Software as a Service (SaaS): Vendors additionally provide most capabilities and functions within the infrastructure

According to Dr. David McClure of the General Services Administration (GSA), cloud computing “Allows users to provision computing capabilities rapidly and as needed; that is, to scale out and scale back as required, and to pay only for services used. Users can provision software and infrastructure cloud services on demand with minimal, if any, human intervention. Because cloud computing is based on resource pooling and broad network access there is a natural economy of scale that can result in lower costs to agencies.”

Based on recent market trends, the demand for cloud products and services is higher among civilian agencies compared to the Department of Defense due to the considerable disparity between both budgets. While DOD has the funding power to utilize cloud strategies to leverage emerging technologies like artificial intelligence and machine learning, the goal for civilian agencies often revolves around system optimization and offsetting high costs in the face of a diminishing budget. For example, the Centers for Medicare and Medicaid Services (CMS) between FY15-FY17 spent approximately $802M on IaaS alone in their agency wide cloud adoption initiative.

GSA has utilized its Centers of Excellence program to help expedite adoption of cloud strategies across the public sector, starting with the Department of Agriculture (USDA) as a pilot program. The goal of the effort initiated in late 2017 was to create “the most effective, efficient, customer-focused department in all the federal government” according to Deputy Secretary of the Department of Agriculture, Stephen Censky. During its implementation, USDA has consolidated 39 data centers into two facilities by transitioning to the Cloud. Using the Department of Agriculture as a lighthouse agency, the Department of Housing and Urban Development (HUD) is next in line to participate in the Centers of Excellence program and receive a much needed infrastructure facelift. The GSA recently released an RFQ through GSA Schedule 70 to initiate the Discovery Phase of the Centers of Excellence program at agencies that will facilitate their partnerships with private industry in their modernization efforts.

The public sectors affinity for the Cloud is also reflected in the makeup of the procurements and requirements on the market. Aside from the large scale transitions taken by agencies like HUD and USDA, many agencies have also procured cloud solutions in smaller scale as they see fit. For example, the Food and Drug Administration awarded a $45M IaaS IDIQ in Q4 FY2018 to allow the agency to procure cloud services as needed moving forward (GovWin Opportunity ID: 154645).

The Department of the Interior US Geological Survey (USGS) is in the midst of a $10B procurement to extend its Virtual Data Center cloud solution across the entire department, covering all future IaaS, PaaS, and SaaS needs (GovWin Opportunity ID: 176919). These are two examples of open procurements pursued by the Government while the vast majority are procured through Best in Class (BIC) vehicles such as CIO-SP3 and GSA Schedule 70. Access to these vehicles will be critical for players looking to position themselves in the cloud arena especially when taking into consideration the government wide Category Management initiative which will likely bundle many cloud requirements together on Best in Class vehicles and schedules. In conjunction with the increasing prevalence of Best in Class vehicles in cloud procurement, FedRAMP certification is becoming increasingly critical for vendors looking to stay relevant as more and more agencies are making it a requirement.

While the desire to implement large scale modernization is good, many agencies will face real challenges. According to Assistant Secretary for Information and Technology and Chief Information Officer for the Department of Veterans Affairs (VA), James Gfrerer, the VA is in the midst of a cloud transformation that involves approximately 350 applications which is roughly half the agencies portfolio. Based on the volume of data, this move is only slated to be completed in 2024. The challenge of a full federal shift to the Cloud lies in Agencies that have been rooted in legacy systems or have not undergone recent upgrades.

The Federal Government has demonstrated a desire and willingness to adopt Cloud strategies in an effort to modernize its IT systems and has taken many steps towards this goal. The Cloud Smart strategy released by the Office of Management and Budget (OMB) in October 2018, lays out the roadmap and provides agencies with the tools to engage with modernization at the degree and pace that best suits them. This partnership with private industry is likely to have significant impact on the acquisition market as Cloud solutions continue to be prevalent in agencies needs moving forward.