Outlook for Cloud Computing in Government
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  • To give a peek into how agencies are looking at cloud computing,we talked to federal IT decision-makers about the primary drivers and obstacles, potential impact, and current state of cloud computing adoption. What we see is that: Cloud is still very much in the early stages but is gaining momentum Most realize that it will have a major impact on how they meet IT needs in the short and long-term The potential cost savings is a major motivation, but Security concerns must be resolved before they will consider broader adoption. It seems that the Obama administration and industry has heard this message loud and clear, and there are 5 indicators that tell us that cloud computing does indeed have staying power. I’m going to count them down David Letterman style, starting with number 5. 02/18/11 Confidential & Proprietary For Internal Use Only
  • Survey: 67% of respondents to INPUT’s survey noted cloud computing as an area of new or increased focus. Cloud Computing Evolution: Education – Because most cloud computing engagements are small and often isolated from the rest of the government community, IT decision-makers will need more education about cloud computing and how it will function within their specific environments. Part of this education must include information about the impact to the rest of the organization and how the agency can plan for it. Building the Foundation – in order to truly maximize the benefits of cloud computing (which is itself service-based), SOA must be implemented to some degree as a foundation. Because of the lack of clear success models and personnel, agencies are likely to start with small pilot projects. Transition – the scope of projects will begin to expand as the administration sets the course for its integration of cloud computing into the federal infrastructure. Agencies do not have enough in-house expertise, so contractor support will be critical. Common Use/Normalization – the administration will enforce the requirement that cloud computing be considered for relevant new procurements, so elements of cloud computing will become more pervasive in future programs. Federal Risk and Authorization Management Program (FedRAMP) FedRAMP works with agencies to develop government-wide baseline security requirements and works with the cloud computing vendors to assess and authorize their systems based on those requirements. Vendor products would be listed as "FedRamp authorized." Rather than complete the entire end-to-end certification process themselves, agencies would have the option of leveraging the work already completed by FedRAMP, and add any incremental steps needed to address agency-specific requirements. Standards Acceleration to Jumpstart Adoption of Cloud Computing (SAJACC) SAJACC is a NIST-led initiative that will validate and communicate interim specifications to agencies in the areas of security, interoperability and data portability. The idea here is that, rather than waiting (possibly years) for formal standards to be developed by consensus, NIST would conduct use tests to validate the viability of cloud computing against specific requirements and share test results with agencies and the public. Budget Requirements - Agencies will be required to complete alternative analyses that include cloud computing-based alternatives as part of future budget submissions. By September 2011 : alternatives analyses for all newly planned or performing major IT investments By September 2012 : alternatives analyses for all IT investments making enhancements to an existing investment By September 2013 : alternatives analyses for all IT investments in steady-state 02/18/11 © 2010 by INPUT. All rights reserved.
  • Defense Information Systems Agency’s - Rapid Access Computing Environment (RACE) and Forge.mil initiatives provide PaaS environments for development, testing, and deployment of software systems. Army - Army’s Experience Center relies on Salesforce.com for its cloud-based recruitment management tool. Air Force - Air Force’s Personnel Services Delivery Transformation program has adopted a cloud-based human resources tool. Energy - Lawrence Berkeley Laboratories has adopted Google Federal Premier Apps for its email, documentation, and collaboration functionality, and is also evaluating Amazon Elastic Computing Cloud (E2C) for handling its excess capacity. Interior – the National Business Center (NBC) offers hosting (IaaS) and a development environment (PaaS) for federal enterprise solutions. Commerce - The Census Bureau tapped Salesforce.com to drive its Integrated Partner Contact Database, a CRM tool to coordinate and track partnership activities. Health and Human Services - HHS looked to Salesforce.com for its CRM and project management solution to support implementation of electronic health records systems. General Services Administration - As a leader in the federal cloud strategy, GSA moved its USA.gov Web site to Terremarks’ cloud environment and also plans to shift to SaaS for its email and message needs. NASA – Its Nebula platform is an open-source cloud computing environment that currently offers scalable computing, storage, and networking resources (IaaS) to NASA-related programs. 02/18/11 © 2009
  • Software: with pressure to consider cloud computing alternatives first, agencies will consider functional need before the delivery mechanism. Traditional licensing models will need to give way to more flexible arrangements. Hardware: while agencies will need to spend on updated hardware for data center consolidation (especially since the preference seems to remain with private clouds), over time some of that demand will be filled by IaaS. IT services: SaaS and IaaS could impact the demand for application and infrastructure-type services. SaaS seems to be an area where agencies feel more comfortable going with a public option where the 3 rd party provides those services. For infrastructure, the impact is primarily due to the reduced infrastructure sprawl that will reduce the need for the same level of services. However, that demand will switch over to services to manage private clouds. Comm/NS: This is where cloud computing lives in the INPUT forecast (processing services), so this is where the dollars will flow. However, the big opportunity here is for Communications-as-a-Service Unified Communication (UC) is the integration of voice, video, messaging, and data services into a unified architecture that enhances communication and improves business processes by eliminating silos by information type. By deploying a UC Architecture (UCA) in the cloud, agencies could eliminate interoperability problems. integration of enterprise applications with an IP-based communications backbone enables the sharing of mission-critical information in real-time with the relevant actors, facilitating collaboration and better decision-making. Architecting for UC within the Fed Data Center Consolidation Initiative would increase the cost advantages, but it also would’ve increased cost and complexity. Minimal adoption but potential there for Networx vendors (many of which have already expanded into cloud computing) to shape this emerging market.
  • While the cloud computing market represents a fraction of total IT spending, the high CAGR (nearly 6 times that for the total IT market) is the story. We anticipate high growth in this area – in fact this forecast is likely conservative. INPUT will analyze FY12 budget data to determine if the potential market will be greater due to increased focus by OMB, GSA and other agencies.
  • Looking ahead, there are some challenges to be overcome. Agencies have been technologically and culturally stovepiped, which limits economies of scale and therefore may inhibit a core benefit of cloud computing. Funding – a tight budgetary environment means that agencies will have hard decisions to make about where to reprogramming dollars for this effort Cultural – there are cultural barriers that will require hurdling as agencies grapple with loss of control of some parts of their IT environments. Security – agencies are coming under much more scrutiny and requirements for securing their IT environments, with many feeling that cloud only complicates the issue. The security answer must be simply enough to make agencies believe it doesn’t require much more activity than they were already prepared to conduct to meet new requirements on the way. Licensing -   Because cloud computing provides a large group of users with on-demand network access to a shared pool resources, conventional licensing agreements are problematic. As the cloud model matures, agencies will expect vendors to offer more flexible alternatives that save money and simplify the acquisition process. Vendors are being challenged with an expanding pool of competitors as both small and large vendors enter or expand within the cloud market. They also have work to do to overcome some of the hesitation with agencies as well as adjust their business models for cloud procurement. However, there is clearly opportunity there as cloud gains momentum. First up are the low risk solutions I mentioned earlier, but also with private clouds, and we anticipate seeing much more when the FY12 budget request is released in a couple of weeks. With that, I’d like to turn it back over to Mike to kick off our discussion about these and other issues shaping the federal cloud market. 02/18/11 © 2010 by INPUT. All rights reserved.


  • 1. Outlook for Federal Cloud Computing February 17, 2011 Presented by Kevin Plexico Sr. Vice President, Research and Analysis Services
  • 2. The Mindset of Federal IT Executives 19% 54% Have cloud computing solution(s ) in place Anticipate cloud computing having a major impact on agency IT objectives 55% See cost savings as the primary driver of cloud computing adoption 70% Believe security is the primary obstacle to broader adoption n=37 Margin of Error: +/-3%
  • 3. Cloud Computing FEDRAMP Centralized security certifications service SAJACC Use case validation of cloud offerings as an interim “standard” BUDGET REQUIREMENTS Cloud computing alternatives analysis within the budget process Cloud Computing Evolution
  • 4. Federal Agencies in the Cloud DISA Software Development, Testing, and Deployment Air Force Human Resources Tools Army Recruitment Management Energy Email, Documentation, and Collaboration (Lawrence Berkeley Labs) Interior Hosting (IaaS) and development (PaaS) (National Business Ctr) Commerce CRM for its Integrated Partner Contact Database HHS CRM and Project Mgmt. for Electronic Health Records System GSA USA.gov and internal email and messaging NASA Nebula platform for computing, storage, and networking
  • 5. The Scope of Cloud Computing’s Impact February 18, 2011 CONFIDENTIAL ©2011 Deltek, Inc. All Rights Reserved Software
    • Agencies will begin to consider functionality and capabilities first, and delivery mechanism second
    • Cloud computing challenges traditional software licensing models
    • Data center consolidation will pit hardware against Infrastructure-as-a-Service (IaaS) to establish infrastructure for private, hybrid and community clouds
    • Because of economies of scale cloud providers’ need to build critical mass to spread costs, cloud computing will exert downward pressure on hardware pricing
    IT Services
    • Cloud Computing will eventually impact demand for traditional application management, infrastructure, and desktop services
    • Opportunities exist for IT services contractors that offer expertise/training to support private and hybrid cloud applications and infrastructure services
    Communications and Network Services
    • Long-term horizon: Communications-as-a-Service (CaaS)
      • Could be offered as a component of Infrastructure-as-a-Service (IaaS) or Software-as-a-Service (SaaS
    • Opportunities for vendors holding Networx contracts to shape the CaaS market
  • 6. Cloud Computing Market Forecast, FY10-15 February 18, 2011 CONFIDENTIAL ©2011 Deltek, Inc. All Rights Reserved Source: INPUT Total Market CAGR – 27%
  • 7.
    • Agency Challenges Ahead:
      • Reaching economies of scale
      • Funding issues
      • Cultural issues
      • Security
      • Licensing models
    • Vendor Challenges
      • New competition as most major vendors develop cloud solutions
      • Gaining customer buy-in
      • Required changes to business models
    • Vendor Opportunities
      • “ Low risk” solutions, such as email, collaboration and CRM
      • Private clouds
    Cloud Computing in 2011
  • 8. Q&A February 18, 2011 CONFIDENTIAL ©2011 Deltek, Inc. All Rights Reserved