The U.S. Army’s Uneven March to the Cloud

Modernizing the technology infrastructure of a massive organization is never easy. This is especially the case when you factor in the turnover of leadership personnel. As one team with its own priorities goes out another team comes in, often with conflicting priorities. The old priorities go out the window and the process starts all over again.

This cycle has been particularly true concerning the U.S. Army’s march to the cloud. To wit, the current Army Chief Information Officer, Raj Iyer, announced yet another Army “cloud plan” at last week’s Association of the U.S. Army (AUSA) conference. This plan follows other plans and strategies that came out in the fall of 2019 and October 2020.

The new plan is being put into place by building on top of advances made in the last 18 months of effort. Indeed, there have been advances, but, as both Army cloud spending data and the Army’s cloud budget request for FY 2023 show, progress remains uneven.

Below is the chart showing verifiable Army cloud spending from fiscal year 2014 to 2021 as tracked by Deltek GovWin’s Federal Market Analysis (FMA) team.

The first thing one notices when looking at this data is the rise in spending from FY 2018 to 2020. This type of growth tracks with the Army’s cloud adoption, including spending on both capabilities and related system engineering. The next observation concerns how that previously inexorable rise in spending fell off of a cliff in FY 2021, reaching a point lower than the total recorded in FY 2019.

The decline in Army cloud spending is not attributable to the end of a specific program. Several contracts related to large programs with cloud work which had significant spending in FY 2020 did not have it in FY 2021. These include the following, just to name a few:

• Integrated Visual Augmentation System Prototype - $216M in FY 2020, $0 in FY 2021
• Cloud Migration and Hosting Support Services for Global Combat Support System Army - $16M in FY 2020, $0 in FY 2021
• AESIP Hub Cloud Migration and Hosting Support Services - $38.2M in FY 2020, $3.1M in FY 2021

More important is the fact that of 180 cloud-related contracts tracked by FMA, only 11 notched higher spending in FY 2021 than in FY 2020. This indicates a decline in spending across the board with no easy explanation available for why it occurred.

The army’s proposed cloud budget for FY 2023 shows a similar pattern.

After requesting almost $300M in FY 2021, the Army requested a much higher amount in FY 2022. An interesting observation to be made here is that Army’s identifiable cloud spending in FY 2021 reached $498M and its requested cloud budget for FY 2022 was $481M. It will be interesting to see how the Army’s spending total for FY 2022 turns out compare to this request.

Notice, however, the way the Army’s requested cloud budget for FY 2023 plunges once again to less than $300M. This type of pattern hints at a halting approach or return to a slow marching pace to use a military analogy. Could the drop-off have something to do with the new strategy, which is pushing the Army to integrate zero trust principles into its cloud strategy, and which might in turn force a slower pace of adoption in order to “get it right” the first time?

The answers to these questions aren’t clear. What is clear is that the recent pattern of cloud spending and the request for cloud-related budgetary resources suggests the Army is going to be a highly competitive environment for cloud service providers and companies doing cloud-related engineering work. Budget dollars are not going to be as plentiful in FY 2023. It remains to be seen if this will translate into lower spending.