Observations on the DOD’s Updated Cloud Implementation Strategy

The Department of Defense (DOD) recently published a new Software Modernization Implementation Plan for Fiscal Years 2025-2026. If you haven’t seen the document, be aware that its title might prove deceptive because the content has to do with a lot more than software. Rather, it has everything to do with cloud computing and the ways in which the DOD wants to leverage the technology over the next couple of fiscal years. Today’s post looks at a couple of the objectives outlined in the plan and proposes some of the implications for contractors providing cloud services to the DOD.

Goal 1: Accelerate the DOD Enterprise Cloud

Noting how the DOD set the foundation for enterprise cloud use by establishing the Joint Warfighting Cloud Capability (JWCC), “implementation of select Joint Operational Edge (JOE) nodes proving out the technical design for commercial cloud at the tactical edge,” and expanding on-premises cloud offerings to the tactical edge through the Defense Information Systems Agency’s Stratus program, the DOD is now proposing to “Establish Other Contract Options for Cloud Innovation” by creating a new contract program specifically for small businesses. To quote the document on this goal, the DOD intends to develop a “mechanism for contracting” and “a business model that supports and incentivizes small businesses and niche providers to invest in the DOD mission.”

This goal elaborates on previous comments from defense officials about the JWCC Next program. According to those, the DOD intends to add an undetermined number of capabilities provided by small and medium-sized businesses to the JWCC construct. Given that the DOD already contracts for enterprise-wide Infrastructure and Platform-as-a-Service capabilities, the small business portion of JWCC seems to focus almost exclusively on Software-as-a-Service. To that end, the DOD’s plan calls for establishing an authorization (ATO) “process that provides a lower barrier to entry and faster access to capability.” In addition, given where technology trends are heading, the DOD will be looking for the latest artificial intelligence and machine learning tools. All potential small business industry partners offering a SaaS-based capability should probably integrate AI, if they haven’t done so already.

Goal 2: Establish Department-wide Software Factory Ecosystem

This is a curious one given that every Military Department and the Fourth Estate already has software factories in operation. Some of these have been highly successful as well, including the Air Force’s Platform One and the capability used jointly by the Army and the Marine Corps. The DOD hopes to build on this success by continuing to scale the factories it already has and by coordinating IT disciplines, such as cybersecurity, testing and evaluation, acquisitions, and finance, “to ensure end-to-end enablement and realization of the software modernization vision and adoption of software platforms and factories organized by domain (e.g., command and control applications).”

Enabling the wider use of DOD’s existing SW factories will require analytics documenting DevSecOps adoption, publishing a DevSecOps Platform and Software Factory Catalog, creating a communications plans for SWF synchronization, and providing DOD-wide Software Assurance Capabilities.

The DOD already requires considerable contractor support for its existing software factories. Expanding the use of these will generate more work for those industry partners and provide opportunities for new partners. The types of work needed include software development and system development services, engineering and technical support, testing and compliance services, as well as other related disciplines.

If there is a single major point to take away from the DOD’s new plan it is that cloud computing is the foundational technology upon which the department is basing its future. This means spending on cloud computing should remain strong in the years to come, even though the acquisition of some capabilities might be centralized in the contracts that make up JWCC Next. Cloud investment will nevertheless remain robust across the DOD, which is reassuring to industry partners that have been nervously eyeing the federal technology market since January 20, 2025.