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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WEST 2014 Conference Sheds Light on Acquisition Priorities for the Sea Services

Lloyd McCoy_65x85by Lloyd McCoy Jr., Consultant

Last week industry and government met for the largest event on the West Coast for the maritime services (Navy, Marine Corps, and Coast Guard) and the contractors that support them. Many senior military leaders attended and spoke about the direction they are headed and how industry can help. Their remarks echoed previous announcements that the U.S. as a whole (not just the military) is transitioning to face a variety of interconnected 21st Century threats. The Pacific region is a big part of the equation and since it is largely a maritime environment; the Sea Services are at the forefront.

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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.

Navy Moving Ahead to Overhaul its Shore-based and Afloat Networks

photo_Lloyd-McCoy_65x85by Lloyd McCoy Jr., Consultant

The full deployment RFP for the Navy’s new consolidated network has just been released with the award currently scheduled for this winter. The new network, officially known as CANES, Consolidated Afloat Networks and Enterprise Services, will collapse the Navy’s five legacy networks into one. The aim is to apply the single, scalable, modular design common for the Navy’s weapon systems to its afloat network. This common computing environment will address many of the security vulnerabilities of existing networks, as well as make extensive use of cloud technology. The scope of the RFP will include requirements for the design, development, fabrication, assembly, test, delivery, integration, installation, and sustainment support of the CANES network infrastructure. The Navy also plans to cut down on the 632 systems on 280+ platforms as part of this effort. The rate of hardware refreshes will take place every four years with software refreshes happening every two years. The contract is expected to be recompeted every eight years.

Back in 2010, Northrop Grumman won the initial rate of production contract, with ship installations beginning this year. There will be up to three awardees for the full deployment contract. At a recent conference Rear Admiral Leigher, director of the Navy’s information dominance office, revealed that due to sequestration and budget cuts, the number of installations planned for FY 2013 into FY 2014 will drop from a projected 15 to 8. Rear Admiral Leigher believed that the impact of sequestration, assuming it remains intact, will have less impact in FY 2014 and beyond.

Rear Admiral William Leigher mentioned that major challenges will be configuration management, application management, and end-to-end sustainment due to the wide variety of Naval vessels and combat systems at sea. Regarding configuration management, one of the drawbacks is the money and labor required by the extensive testing process. One of the ideas proposed by Terry Halvorsen, the Department of Navy CIO, was for industry to potentially take a larger role in testing new capabilities like CANES. Other technologies incorporated in CANES will be voice/video services, computer network defense, information assurance, virtualization, and cloud technology.

If you are interested in viewing or bidding on the RFP when it is released, you can find it at https://e-commerce.spawar.navy.mil/. It is also important to note that CANES complements the Next Generation Enterprise Network (NGEN) which will be the Navy’s new intranet for its presence on land. The award for that contract is scheduled for the end of June.

To learn about additional sales opportunities within the Navy, view the webinar I recently presented.

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