Aug 21, 2013 (08:08 AM EDT)
Government Clouds: Interior Dept. Sets New Standard

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9 More Cloud Computing Pioneers
9 More Cloud Computing Pioneers
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The Department of the Interior's (DOI's) decision to invest as much as $10 billion to migrate its IT operations to the cloud, through a set of 10 competing contracts, is perhaps the most significant example yet of how important cloud computing is becoming to federal agencies -- and to leading federal IT service providers. Experts also believe it will set the agency on a path toward becoming a major government cloud service provider.

By committing to a series of contracts, where individual projects will be awarded via task orders, DOI believes it can speed up the acquisition process and generate significant savings by creating a more competitive landscape among service providers, according to a blog post by Andrew Jackson, deputy assistant secretary for technology in DOI's Information and Business Services.

Ten companies have signed indefinite delivery, indefinite quantity (IDIQ) contracts, with each contract potentially valued at $1 billion. Those companies are IBM, AT&T, Verizon, Unisys, Lockheed Martin, Aquilent, Smartronix, CGI Group, Autonomic Resources and Global Technology Resources. All 10 contracts could cost DOI up to $10 billion. The agency, however, believes the money it will save transitioning to the cloud will outweigh the costs. DOI estimates saving $100 million a year between 2016 and 2020 in IT costs with the new model, according to DOI's Jackson. That money will fund future investments and applications, according to the agency.

[ Is IBM fudging its cloud business numbers? See IBM's Cloud Business: Ex-Employee Divulges Shortfalls. ]

The initiative is also aimed at making DOI data more accessible to the public and employees, a move that supports federal projects such as the 25-point Implementation Plan to Reform Federal IT, the Federal Data Center Consolidation Initiative and the Cloud-First Policy.

"The Department of the Interior has really moved out very aggressively and creatively" with its approach to the cloud, said Anne Altman, IBM's general manager for U.S. Federal, in a phone interview with InformationWeek Government. "Cloud computing is not just about the hosting; it's about the deep skills and services to support agencies ... and the software that goes along with that. What DOI has demonstrated here is there is a lot more to cloud than moving the workload," she said.

Cloud computing has proven to be a valuable business model for federal agencies, both economically and operationally, said Kevin Jackson, VP and general manager of NJVC Cloud Services, commenting on the DOI contracts in an interview with InformationWeek Government. But cloud computing also is a critical element for those agencies that provide shared services to other federal agencies and departments.

"By leveraging experience and scale, some agencies -- like the Department of Agriculture -- are also pursuing strategies to become government cloud service providers. I see the DOI Cloud Foundations award through both of these lenses," NJVC's Jackson said. "The National Business Center (a part of DOI) already provides government-wide services. NBC-managed offerings would be a natural evolution for the DOI cloud computing platform."

DOI's approach to acquiring cloud services is perhaps as significant as the department's technology moves themselves.

IDIQ contracts typically provide for an indefinite quantity of services or suppliers for a fixed period of time. The initial project under these contracts is for SAP application hosting. NVJC's Jackson said additional services will likely include virtual machines, storage, database hosting, secure file transfers, Web hosting, and development and test environments. The contracts could be extended through April 2023. DOI will compete individual projects among the awardees, and then assign them via task orders, one for each project. It's expected the competition from across the 10 selected vendors will result in more competitive and innovative offerings.

The first task order already went to Unisys. The vendor is currently at work on that project, which will run up to five years and is worth up to $44 million. Under the task order, Unisys has begun transitioning DOI's financial and business management system to the cloud. The mission-critical system is based on SAP's ERP software platform and is used throughout the department to account for all income and expenditures.