Four Tech Areas Impacting DHS’s IT Forecast Outlook
Published: June 25, 2014
It is IT market forecast season here with the GovWin Federal Industry Analysis team and we are putting the finishing touches on our annual federal-wide IT market forecast report. With its release just days away I thought I would give a little preview of how four major technology areas are influencing our outlook at the Department of Homeland Security (DHS) – specifically data center consolidation, cloud computing , mobility and big data.
DHS has one of the largest IT budgets among federal agencies so there’s naturally an abundance of interest in where they are going with their IT budgets. While final appropriations for the upcoming 2015 fiscal year (FY) won’t be finalized for a few months, here is what we can observe from their IT budget request sent to Congress:
- Total IT request of $5.8B decreases just $3M or -0.1% from FY 2014. The FY 2013-14 increase of $473M or 9% is essentially sustained, although flat going into FY 2015.
- New development (DME) decreases $62M or -6.5% from FY 2014-15, continuing a shift from DME to O&M spending. The FY 2013-15 DME level decreases $107M or -11%.
- Operation and Maintenance (O&M) or Steady State (SS) increase $59M or 1% from FY 2014-2015. The FY 2013-15 increase of $577M or 13% is sustained, but flattens this year.
A few weeks ago I wrote about some of the IT priorities and challenges with which DHS is grappling and that most of these will be persistent challenges for the foreseeable future. Here is how these and other market factors play into the four technology areas and how they impact the forecast outlook for the next few years.
Data Center Consolidation
- Background: DHS has reduced dozens of existing component data centers down into its two core data centers – DC 1 and DC 2, which are being leveraged to offer shared services and improve efficiencies across the department. Annual savings is $17 million, and could reach $3 billion by 2030. The National Center for Critical Information Processing and Storage (NCCIPS) at the Stennis Space Center (DC1) also holds critical assets for Navy, Transportation, Veterans Affairs and others.
- Forecast Outlook: Consolidation funds will eventually dwindle, but operational contracts will persist. Congress provided $42 million in FY 2014 to DHS for data center consolidation activities. However, the president’s FY2015 budget does not request new funding.
- Background: DHS leverages cloud architectures and shared services as a major linchpin in their thrust toward an IT-as-a-Service operational model. Their aggressive look at various ways to adopt cloud is central to efforts to reduce costs and gain efficiencies and improve speed, including deploying Platform-as-a-Service (PaaS) for software development environments supporting agile methodologies. Directorates like USCIS and others are shifting their website infrastructure to cloud DHS’ cloud environment as they redesign their websites for greater functionality. Cloud security is a major focus within DHS’s overall cybersecurity efforts. As such, DHS prefers private cloud offerings.
- Forecast Outlook: DHS’s cloud efforts will continue to be primarily in the private cloud domain as the concern for security remains. This private cloud preference is also rooted in DHS’s concurrent efforts to consolidate infrastructure, transition to new data centers and improve their mobility capabilities, data management and shared services. Opportunities exist for incremental capabilities to aid in leveraging cloud for tech priorities. Cloud services may be bundled with other services like integration and legacy support.
- Background: DHS has lead in several areas of mobility. They helped create the Mobile Security Reference Architecture (MSRA) as a gov-wide framework to help agencies procure and manage mobile devices, applications, and data in smart, secure, and affordable ways. Their Infrastructure Transformation Program (ITP) has been integrating component wireless and terrestrial networks and their Mobile Device Management Mobile Application Store offers device management solutions. Further, their Workplace-as-a-Service initiative includes mobile device management and authentication technologies. DHS is collaborating with other CIO Council participant agencies to support continuous monitoring on mobile devices. DHS continues to wrestle with BYOD security and management in a law enforcement context.
- Forecast Outlook: Opportunities exist in secure mobility alongside effective mobile device management. Economical mission-centric mobile solutions will continue to be in demand. Controlling IT costs and enabling shared services are priorities.
- Background: DHS looks to big data analytics is a priority to data mine mission data that allows agency staff to draw linkages, see patterns and prevent threats as well as to avoid spending time on unnecessary areas that divert resources and dilute effectiveness. Significant progress has been made around common data standards and data sharing to create standard indicators and aid interoperability among internal units and across agencies, e.g. common formats at the ISACs. DHS currently has 70 organizations, owner-operators, agencies, etc. in the cyber information sharing collaboration sharing 26 generally unclassified threat indicators. An ongoing goal is to effectively automate machine-to-machine data sharing of indicator data at the data element level, e.g. STIX and TAXII protocols.
- Forecast Outlook: Opportunities will continue to center on analytical frameworks and tools to enhance a real-time common operating picture through, integrated data collection, analytics, visualization, geospatial information systems, etc. Automation and standards are priorities.
The impact of these and other factors on the five-year outlook for IT spending at DHS means that overall growth will be significantly muted with strong downward pressure on infrastructure investments in both hardware and software, although some communications needs will move forward. Further, major acquisition delays like those we have seen on EAGLE II combined with strong pressure on labor rates, modular contracting, and contract performance scrutiny will likely stifle IT services growth. DHS continues to squeeze IT spending to shift dollars to other mission areas.
Mission priorities will give some select relief in IT investments in the major pain points, however, so the key to finding contract opportunities will be in directly linking your offerings to immediate mission needs by providing incremental gains with short turn-arounds.