FY15 Defense IT Budget Forecast: Cloudy with No Chance of Sequestration

Lloyd McCoy_65x85by Lloyd McCoy Jr., Consultant

The FY15 base DOD budget request came in at $495.6 billion, (about even with FY14) but more importantly, it’s under OMB’s budgetary caps, meaning sequestration isn’t in the cards for this year. Diving into the DOD IT budget, we see a 6% drop from FY14 to about $36.4 billion; fortunately, much of this decline has to do with a shrinking workforce and cost-savings generated by earlier IT investments.

Soldier with Flag Draped in BackgroundYes the budget is down 6% from last year, but before you go running for the hills, it’s important to remember the following: while the IT budget is reduced from FY14, agencies that purchased software are continuing to purchase software— and with no sequestration and government shutdown in sight, we’re positioned to see a better FY15 than we did FY13.

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2015 NDAA could transition JIE from Concept to Concrete Reality

Lloyd McCoy_65x85by Lloyd McCoy Jr., Consultant

lloyd - may 9 6If you’ve sat through our briefings or articles, you’ve no doubt heard us emphasize that the JIE is not a program of record.  It doesn’t have a budget or a program manager and remains a concept focused on interoperability and a shared security architecture.  Sure, recent funded activities like Joint Regional Security Stack (JRSS) and Multi Protocol Label Switching (MPLS) which are aimed at increasing bandwidth and consolidating security architecture are being publicly framed by those involved as being in the spirit of the JIE.  However, there remains no authoritative framework defining whether this or that program is part of the JIE.

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DISA at the Center of Pentagon’s IT Modernization Plans

Lloyd McCoy_65x85by Lloyd McCoy Jr., Consultant

Despite its relatively small size within DOD, the Defense Information Systems Agency (DISA) has an outsize role in the Pentagon’s IT initiatives. When it comes to technology, DISA’s efforts are structured around four strategic goals:

  • Evolve the Joint Information Environment
  • Provide Joint Command and Control
  • Operate and Assure the Enterprise
  • Optimize Department Investments

These goals are in keeping with DISA’s role as the purveyor of command and control systems, enterprise infrastructure, and storage for the Department. DISA’s mission also places it in the unique position of be in the center of every facet of the Pentagon’s overall IT modernization goals and thus a key insertion point for the product community. DOD CIO Teri Takai’s “10-Point Plan for IT Modernization” is aimed at meeting the Department’s IT challenges and is a key facet of its overall goals of cutting waste and saving money. Several of those modernization goals with DISA’s role in them are as follows:

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DOD Cloud Demand Increases, but DISA’s Role May Change

Lloyd McCoy_65x85by Lloyd McCoy Jr., Consultant

DISA’s role as the central broker and provider of cloud services for all of DOD is in jeopardy. Back in July 2012, Department CIO, Teresa Takai designated the agency as the DOD cloud broker. That means DISA manages the use, performance, and delivery of cloud services for DOD customers. The precursor to this designation was, DISA First, a policy where Defense agencies would consider the Defense Information Systems Agency (DISA) for data hosting before considering other options. The outcome of these policies, ideally, was DISA being the key facilitator for all things cloud. So far these strategies have worked with mixed success.

DISA’s $450 million draft RFP, released in the summer to supplement its private cloud services with commercial cloud offerings is now being revisited because of lukewarm buy-in from the rest of the Department. Also, Takai’s push toward a cloud-based and DISA managed enterprise email system is facing resistance from important DOD stakeholders like Navy and Air Force. The consistent thread through all of the opposition is cost, as many within the military branches believe it would be cheaper to purchase cloud services directly from industry. Also, while they may not say it publicly, there is resistance within many in the Department to outsourcing cloud procurement outside of their respective silo. The result is that DISA’s first two major initiatives, the cloud contract and enterprise email, have met mixed success.

That’s not to say that adoption of cloud technology is shrinking within DOD. The 2012 National Defense Authorization Act directed that DOD move in the direction of adopting cloud solutions for its data. Trends suggest the Department is indeed following this mandate. Cloud image 2The Navy, for example, is working with commercial cloud providers like Amazon Web Services (AWS) for many of its public websites. The Pentagon is still closing data centers and reducing applications, thus increasing the need for cloud services down the road. These are just a couple of the many examples of cloud adoption spreading across the Department.

Expect cloud buyers to be distributed across the Department and less focused around DISA, an outcome that Teri Takai may not have wanted, but one that doesn’t necessarily impact the dollars spent on cloud offerings. DISA will still play a key role in cloud implementation and management for the Department, particularly with regard to private hosting requirements, like for sensitive, non-public data. Also, the Joint Information Environment, a conceptual end-state featuring interconnected and shared IT infrastructure across the DOD enterprise will rely on core data centers that will be managed by DISA. That will not change.

If you are selling cloud services into the Department, know that trends toward cloud adoption are here to stay and be aware of the following challenges they have highlighted as pain points:

  • Cyber security
  • Continuity of operations
  • Resilience
  • Data migration and management
  • Overcoming network dependence in low-bandwidth environment

The bottom line is that if you are a cloud provider working in the Defense market, whether your particular DOD agency or military branch is pursuing a go-it-alone strategy or going through DISA, the cloud market for DOD will remain robust for the foreseeable future.

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