Department of Defense

As US Government Agencies Continue Cloud Push, Revenue Opportunity for Service Providers Grows

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On Tuesday the Department of Defense (DoD) acting CIO Terry Halvorsen announced it will perform a database consolidation that could lead to $10 to $20 billion dollar savings in a few years. The agency intends to evolve from a legacy system to a newer one that will better serve the organization. A cloud-based database may be the solution as other government services are being shifted into commercial clouds.

“As we do those reviews, we’ll begin to isolate what is the best database…what has high value, what is accurate and [whether] its cost is good,” Halvorsen said in a conference call with reporters. “And we will start collapsing the other databases into the single database.”

He also said that the Defense Information Systems Agency (DISA) will continue as the DoD’s cloud broker. However, there will be changes to how the DoD uses outside computing. The DISA will approve security plans for the military seeking to use outside cloud services.

Other governments such as Australia and the UK are moving to public cloud services.

“Moving into the commercial cloud will be less expensive while enabling enhanced network storage and protection in a more agile environment,” Halvorsen said.

The acting CIO seems to be proceeding in accordance with the policies of the previous CIO Teri Takai. In April, Takai said the DoD could save money by moving to the cloud, but it needed to set security requirements that outline the details of this move.

This was in contrast to previous information that the DoD had no need for public cloud services. The WHIR previously reported that the Defense Information Systems Agency wasn’t moving forward with a $450 million cloud computing contract due to lack of interest from the DoD.

Earlier this month the E-Commerce Times reported a pilot program in which the DoD has been moving more services to the cloud. The DISA approved a protocol that allows the use of outside cloud vendors for higher security level data. Levels 3 to 5 of its Cloud Security Model are being stored on the AWS GovCloud. It is the only company with higher level data storage; CGI Federal and Autonomic Resources are only authorized for level 1 and 2 data.

“DISA is working with the services to implement several commercial cloud pilots in the very near term while continuing to work with other cloud providers on the provisional authorization process.” Mark Orndorff, DISA’s program executive officer for mission assurance told E Commerce Times. “The AWS authorization is limited to only approved pilots using the AWS Infrastructure as a Service offering at this time, and is not currently extended to include other shared services.”

While AWS for the moment has a lock on government cloud services in this pilot program with DoD and DISA, the potential revenue opportunities for other cloud providers going forward is huge.

“Assessments of FedRAMP-compliant offerings from providers such as HP, Lockheed Martin, AT&T, Akamai, Microsoft and Oracle — along with a cloud solution offered by the U.S. Department of Agriculture — are under way. We continue to work closely with the FedRAMP program office and cloud providers to add to the list of approved cloud offerings,” said Shawn McCarthy, research director at IDC Government Insights to the Times. “We predict that DoD will spend about US$165.7 million on cloud efforts in federal fiscal year 2014 — but that is for all types of cloud, not just the security levels recently approved for AWS.”


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One Comment

  1. Alex

    I wonder how many people know that the US govt is pushing cloud hosting. If its popularity grows, then I would assume not that many. Personally, I've been debating whether to stay with my standard web hosting or try "the cloud". The title of this article was enough to end that debate: no cloud for me. So big thanks for the tip! This is bad news for what seemed like a good idea. If the word really gets out, It could be really bad news to for those who developed it too, and for all these new cloud hosting providers who could be left without a single customer overnight! If that happened, I would feel sorry for them, but still hope it does.