Network Consolidation as a Technology Multiplier

Published: June 12, 2019

Federal Market AnalysisUSDAUSAFARMYCDCCloud ComputingDEFENSEEDUCGSAInformation TechnologyNetwork ServicesDOT

Federal agencies are consolidating networks like never before, paving the way for enterprise cloud services and other emerging capabilities.

Back in the early 2000s the U.S. Navy came to the conclusion it could no longer afford to sustain the IT networks upon which it had become so reliant, so it outsourced management and modernization of those networks to Hewlett-Packard as part of its Navy-Marine Corps Intranet effort. Two decades later federal agencies across both the Department of Defense and Civilian sector of government have reached the same conclusion – that modernizing networks is too costly an undertaking for them to afford given ongoing pressure from Congress and the White House to reduce information technology spending.

Reducing costs is not the only factor driving network consolidation. Closing security vulnerabilities and gaining efficiencies are, too. There is another important driver as well – cloud services. Agencies are finding that enterprise cloud requires greater network throughput capacity. The number of Software-as-a-Service (SaaS) based capabilities out there is growing and agencies want to use them. Federal spending on SaaS came in at just under $1.2B in FY 2018 after reaching $748M just one year earlier. That is growth of 60% in one fiscal year. Latency can be a big roadblock, though, raising the question how agencies can get the capacity they need.

Department of Defense

Blessed with the authority to award Other Transaction Agreements, parts of the DOD have been pursuing a new outsourcing strategy for network services.

  • Air Force is leading this trend toward government-owned, contractor-operated (GOCO) network services with the award of three OTA contracts for what it calls Enterprise IT-as-a-Service (EITaaS). These awards, to Microsoft and AT&T in September 2018 and to Unisys in March 2019, are for building prototype GOCO networks at up to 20 bases. If the experiment is successful, Air Force plans to roll it out to more facilities.
  • Encouraged by the Air Force and OTAs, the Army is following suit with plans to launch its own EITaaS effort in FY 2019. Implementation of a modern, commoditized GOCO network will start with a prototype effort at Army Futures Command in Austin, Texas. If this effort is successful, the program could expand to all 288 of the Army’s camps, posts, and stations.
  • Defense Agencies are taking a more traditional approach to consolidation with the Defense Information Systems Agency’s 4th Estate Network Optimization (4ENO) initiative. Collapsing all Defense Agency networks into DISA will consolidate $1B in network spending and facilitate the delivery of services provided via DISA’s milCloud 2.0.

Civilian Agencies

Strategies vary across the Civilian space, but the objective is the same – to modernize and consolidate IT networks. Here are just a few examples.

  • The Department of Agriculture is using its Working Capital Fund to finance network modernization via the General Service Administration’s Enterprise Infrastructure Solutions (EIS) contract vehicle.
  • Education reported saving $500K in FY 2018 by modernizing its network infrastructure to increase bandwidth and implement automated traffic routing.
  • The Centers for Disease Control and Prevention has made upgrading its core IT transport functions via GSA’s EIS vehicle a priority to enable cloud.
  • The GSA itself awarded 10 Discovery BPA contracts for IT Infrastructure Optimization as part of its Centers of Excellence initiative in June 2019.
  • The Department of Transportation intends to centralize infrastructure operations under its Enterprise IT Shared Services IDIQ contract, which is pending award, as well as leveraging GSA EIS.

The bottom line for industry in all of this is that the federal government has finally come around to the need for modernized networks in order to leverage cloud technology as quickly as possible. This is but a first step in the evolution of federal IT ecosystems as consolidated, and in some cases contractor-operated, networks will further enable in a whole array of new technologies, including software-defined networking and artificial intelligence. Industry should therefore expect a growing number of competitive opportunities to appear for network consolidation, optimization, and modernization work. The future of federal IT appears to be now.