Takeaways from the Recent GAO Report on Federal Cloud Computing

The Government Accountability Office (GAO) recently published a report on federal cloud adoption which showed that agencies have increased their adoption of cloud computing. Unfortunately, the GAO also discovered that gathering reliable data around related costs and savings remains elusive. The GAO carried out the study to track compliance with an FY 2012 requirement from the Office of Management and Budget (OMB) that agencies “assess all information technology (IT) investments for [the applicability of] cloud services.” Here is what the GAO found for the 16 agencies it examined.

Since FY 2016:

• The GSA and SSA have increased their use of cloud services by 20% or more.
• Agriculture and Commerce have increased their use of cloud services by more than 10%.
• Six agencies (HHS, Justice, State, Treasury, DOT, and SBA) have increased their use of cloud services by up to 10%.
• Four agencies, including Education, DOD, DHS, and VA have decreased their use of cloud by as much as 5%.
• Two agencies (DOE and Labor) showed no change in their use of cloud services.

These percentages come from data posted by agencies on the IT Dashboard.gov website. The 16 agencies in question carried out cloud computing assessments for 5,180 out of a total of 6,157 investments planned for FY 2019. So, in terms of program assessment, agencies have been working toward the goals set out for them by the OMB.

So far, so good. At this point, however, GAO investigators note that the data available to them is pretty dicey. For example, although the 16 agencies examined “had saved $291 million to date” from adopting cloud services, the investigators also “identified issues in tracking and reporting cloud spending and savings data, including not having consistent processes in place to do so.” In other words, agencies had achieved savings of nearly $300M, but they couldn’t actually point to a consistent process for arriving at this number.

The GAO’s challenge might sound familiar. Five years ago the independent Council of the Inspectors General on Integrity and Efficiency (CIGIE) published a report showing that agencies could not provide reliable data on the number of cloud investments they’d made or what they were spending on them. According to the GAO the same issue still exists, with additional complexity introduced by frequently changing reporting guidance from OMB.

What should industry take from this?

1. Trust but verify. Weigh agency data against other sources, including in-house research and third-party market analysis organizations like GovWin. According to the GAO, for example, the Department of Veterans Affairs decreased its adoption of cloud from FY 2016 to the present. This might lead corporate sales leaders to think the VA is a poor prospect for business development efforts. GovWin’s data shows, however, that the VA’s spending on cloud rose from $215M in FY 2016 to $769M in FY 2018, translating into growth of 268% over 3 years.
2. Focus on the details. Take into account that agencies are still learning how to define and inventory cloud investments. The GAO report revealed some highly encouraging activity at certain agencies, for example. Education revealed in a letter to the GAO that it had awarded an IT services contract it plans to use to carry out an enterprise IT infrastructure cloud migration. Imagine the impact this will have on future competitive activities. The VA, meanwhile, reported its intention to migrate at least 350 applications to the cloud by 2024 and DHS has created a cloud steering group to aggressively transition to cloud. These are big developments showing growth and change in the market and yet they weren’t headlines.
3. Look past the confusion. The GAO notes that agencies reported confusion when it came to knowing what data to report and how, largely because OMB has changed the reporting template multiple times from FY 2016 to the present. OMB is still feeling its way forward, too. As reporting granularity grows under the new Technology Business Management model our understanding of the cloud market should increase.

Summing up, developing firm conclusions about the federal cloud market remains a challenge even for the GAO. Agency data is scattershot and processes are not uniform. Industry will be wise to trust its own business development research and use third-party resources to verify market assumptions whenever possible. Remember, Deltek's Federal Market Analysis team developed a database of cloud efforts to provide exactly this type of information.