Clarifying the Air Force’s Cloud Migration Budget

Last week’s post on Department of Defense Cloud Budget Estimates pointed out a problem with the data being reported under the category of cloud migration. Specifically, the problem is that the Army, the Navy/Marines, and the Fourth Estate did not provide much data showing what they plan to spend in fiscal 2024. Only the Air Force offered a realistic picture of the migration budget it is considering. Here is the chart included with that post to illustrate the reporting discrepancies.

Why three-quarters of the DOD reported so little planned spending is a mystery. Remember the Navy announcing a few years ago that it would be sending every workload it could to commercial cloud providers? It reported an FY 2024 migration budget of $0. The Army is hoping to award a $1.0B Enterprise Application Migration and Modernization contract vehicle by the end of FY 2023. It also reported a migration budget of $0. Even the Defense Agencies, all of which are in the process of migrating their workloads to the cloud, and which do not anticipate being finished with that work in FY 2023, reported a migration budget of only $3.0M in FY 2024.

As for the Air Force, a recent comment by departing Chief Information Officer, Lauren Knausenberger, could offer a hint why it reported a cloud migration budget. Telling host Jason Miller of Ask the CIO that back in 2020 when she took office the Air Force didn’t have the funding for things like cloud migration, Knausenberger went on to explain how today the Air Force has “fully funded our cloud accounts, which means that we can migrate applications at a faster rate into the cloud.”

The $208M cloud migration budget shown in the chart above makes more sense now. It shows that the Air Force has the funding it needs to make a big push. And push it will, using a new contract called Enterprise Application/System Modernization and Migration to Commercial Cloud. The Request for Information (RFI) for this effort came out on May 17 under number C1NMMRFI and it provides details concerning the level of effort that it expects.

According to the Statement of Objectives, the single contractor awarded the agreement will be required to migrate 200 applications per year to the cloud. Here is a table from that RFI:

Altogether, the Air Force will migrate 1,000 applications through FY 2027-2028. The vast majority of these apps will go to Air Force’s Cloud One and, eventually, to Cloud One Next once the contracts for it are awarded. This means that established Air Force partners Amazon Web Services, Microsoft Azure, Oracle Cloud Infrastructure, and Google Cloud Platform will receive most of the workloads concerned. The migration will only occur, however, after the Enterprise Application Modernization contractor performs “deep application assessments for application owners and, if tasked by the application owners, the modernization and migration of applications into DoD-authorized IL2, 4, 5, and 6 commercial cloud environments.”

So, there we have it. Now industry knows why the Air Force reported the cloud migration budget that it did and what commercial partners can expect from the Air Force concerning cloud migration over the next few years. Extrapolating from the Air Force’s proposed cloud migration budget suggests that it expects to spend nearly $1.0B over the next 5 years. This figure confirms what we here at Federal Market Analysis have been saying for several years now—that the best business opportunity at the DOD is cloud engineering, not providing a cloud-based service in itself.