Top Competitors in the Federal Cloud Computing Market

With the Department of Defense’s Joint Enterprise Defense Infrastructure (JEDI) contract competition putting a spotlight on two of the largest commercial cloud services providers, it might be worthwhile to take a broader look at the competitive landscape. After all, there are hundreds of companies working in the federal cloud market. The data shown below is arranged by the earnings of prime cloud contract holders from fiscal years 2016 to 2018 and it reveals what some might consider to be surprising results, not only for the companies that occupy the top spots, but also for the companies that don’t appear.

Top Defense Cloud Contractors by Obligations

Starting with the Defense side of the market, here are the top earning cloud primes from FY 2016 to FY 2018. Full FY 2019 data is not available due to the fiscal year still being in progress and the fact that DOD’s reporting lags by 90 days.

The first thing to know when viewing this data is that these companies’ earnings were for cloud services and engineering across all service delivery (i.e., as-a-Service) types. These are not all big infrastructure providers, although each probably has the capability to provide substantial cloud infrastructures for federal customers. For example, while all of the obligations earned by Knight Point Systems’ are for Infrastructure-as-a-Service (IaaS), Hewlett Packard Enterprise Services (HPES) and Dell’s totals derive from Software-as-a-Service (SaaS) earnings. The totals for other competitors, like Northrop Grumman, not a household name when it comes to cloud work, come from obligations for a combination of services, including IaaS and Platform-as-a-Service (PaaS). The cloud market is indeed a diverse place.

Top Civilian Cloud Contractors by Obligations

The picture is similar in the federal Civilian sector of the market, where some of the same companies appear in the top ten.

Most of HPES’s earnings came from providing IaaS capabilities, as did By Light IT’s, CGI Federal’s, Leidos’s and Smartronix’s. Meanwhile, Dell’s total derived largely from PaaS and GD IT’s and Buccaneer’s totals came from engineering work.

Observations

The small data set provided above allows us to make several observations.

First, the federal cloud market is a diverse place, not limited to only the direct provision of a service via the classic cloud model. Engineering of federal applications and other technical management work remains lucrative.

Second, the two top JEDI competitors do not show up in these data sets for either the Defense or Civilian sectors of the market. This is because both providers tend to sell their services via resellers so their impact on the “visible” cloud market is largely hidden.

Finally, providing SaaS capabilities is becoming almost as profitable as providing IaaS. Deltek expects this profound shift in the market to accelerate as agency use of cloud services matures.