Crystal Ball 2020: What to Expect in Federal Cloud Computing

Published: January 08, 2020

Federal Market AnalysisCIO-SP3Cloud ComputingInformation TechnologyOutsourcingSTARS II

What’s coming for federal cloud investment?

For several years now we here at Deltek have been forecasting that fiscal 2019 would be an inflection year in the federal government’s use of and investment in cloud computing solutions. We based our forecast on a number of factors that we saw as necessary for the market to experience faster growth, including a few of the following major developments that should be important in fiscal year 2020.

Funding Options: The federal budgeting process has long been a major roadblock hindering cloud adoption. Based on a utility computing model, cloud’s promise rests on the ability of customers to buy capabilities “by the drink,” but with agency budgets shoehorned into discreet buckets that must be spent every fiscal year, the system has proved too inflexible to allow agencies to take advantage of cloud’s utility computing characteristics. Fiscal 2019 saw the advent of new funding mechanisms that agencies could leverage for investment, including cloud working capital funds, and Technology Modernization Fund, funding for a small number of select modernization programs.

Prediction: Fiscal 2020 will see a growing number of Civilian agencies establish working capital funds specifically for the acquisition of cloud technology and services. Allowed by law, and encouraged by the Congress, these WCFs, will start small, with funding dedicated to pilot efforts, until any bugs that arise in the approach are worked out.

Cloud Management: Several years ago a series of investigations by numerous Inspectors General revealed that agencies could not adequately track or manage the type and number of cloud investments they had. In response, agencies like Veterans Affairs established Cloud Computing Program Management Offices, or named specific individuals in their IT shops, to govern their developing cloud ecosystems.

Prediction: Agencies will show greater interest in acquiring automated tools for managing their cloud investments. The sudden explosion of investment in cloud computing has led to sprawling ecosystems comprised of dozens of industry partners providing all kinds of capabilities. Now that many agencies have designated offices and officials to provide oversight of their cloud investments, those organizations will require tools to manage the capabilities being used. Robotic Process Automation could prove key here.

Evolving Acquisition Methods: For several years now the Office of Management and Budget and General Services Administration have been pressuring agencies to adopt a Category Management approach to organizing their technology investments. Category Management drives agency procurement toward GSA-defined Best-in-Class (BIC) contracts aligned with CM principles.

Prediction: Several BIC contracts offer cloud goods and services, this fact, and the pressure agencies are under to adopt CM, makes it likely they will procure a higher percentage of cloud requirements through BIC contracts than ever before. This trend will benefit industry partners holding places on BIC contracts, including GSA’s Enterprise Infrastructure Solutions, Chief Information Officer Solutions and Partners 3 (CIO-SP3) Large and Small Business, and NASA’s Solutions for Enterprise-Wide Procurement (SEWP) V.