Cloud Confusion: Does Sluggish Federal Cloud Adoption Mean Opportunity For Solution Providers?

Three years after the government launched the Federal Cloud Computing Strategy, commonly referred to as Cloud First, the federal public sector is still not catching onto the cloud, an Accenture study found. However, solution providers say that doesn't mean the government cloud market is dead. In fact, they say there is a huge opportunity for growth over the next few years.

The Cloud First Policy, launched in February 2011, mandated that government agencies have to consider a cloud-based option when making IT decisions and investments. However, the Accenture study found that of the 20 cloud migrations submitted to the Government Accountability Office in 2012, only one of the projects was complete. Eleven of the plans failed to report performance goals, and seven did not include any cost estimates.

In fact, 58 percent of the 286 respondents from high-level positions within a wide array of agencies said that they didn't even know what strategy their agency was taking in regards to the cloud. However, that doesn't mean that they aren't aware, said Annette Rippert, managing director technology solutions at Accenture.

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"We have a lot of progressive thinkers across the federal agencies. This is certainly not something that goes unaddressed," Rippert said.

The problem is that nothing in the government moves quickly, especially when legacy systems are still in place that give them an excuse not to make the switch, said Larry Hymson, vice president of client services at Morris Plains, N.J.-based CherryRoad Technologies.

"I think that they're adapting to the cloud quickly," Hymson said. "It's government so nothing is fast."

While most agencies have moved fewer than 10 percent of their portfolios to the cloud, that doesn't mean the government won't adopt it going forward, Hymson said. Although it might seem slow from a commercial standpoint, there isn't really the demand yet for government agencies to make the switch to the cloud when their legacy systems are still in place and functioning.

"You wouldn't expect them to do it when they don't have to," Hymson said. However, when those legacy systems expire, there will be a huge opportunity for solution providers to help them make the switch to a more cost-effective cloud system, he said.

Part of the hesitation is a lack of understanding of the cloud and cloud solutions, Kumar Nandigam, CEO of Tekpros, said. The Accenture study found that 44 percent of managers were either not familiar with cloud strategies or didn't know the agency's cloud strategies, and 13 percent did not have a cloud strategy at all.

"It's a new thing to them to learn about it and to adopt the cloud," Nandigam said.

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Part of the hesitation might be attributed to the cautious nature of government agencies, Accenture's Rippert said, especially concerning security. While it means that it might take the agency longer to move to the cloud, Rippert said that it ultimately might be better because they are able to implement responsible best practices.

"It really sounds ironic on the surface, but I think if you take a look at the manner in which many federal agencies are using the cloud, you can better understand how they're putting strong security structures in what they want to deploy," Rippert said.

For example, Rippert said, the Federal Risk and Authorization Management Program (FedRAMP) provides a government-wide program to authorize the security and monitoring behind cloud platforms. That program in particular has pushed forward cloud projects that otherwise would have been delayed for security concerns, she said.

"It’s a huge opportunity for us because most of the software we are doing," Tekpros' Nandigam said. He said his company used to do a lot of hardware, but it made the decision to focus solely on the cloud. He said that Tekpros did zero hardware sales in the past year.

"There are a lot of initial views, which we are taking. We see a lot, a lot of opportunity for solution providers like us because most of the [government clients] will be moving to cloud in the next two to three years," Nandigam. "We have a lot of resources who are supporting our clients, and we move them all back into our cloud solutions, ... so now it's all cloud. That’s what we're talking about."

It all comes down to education, Nandigam said, because misunderstanding and misinformation are two of the biggest barriers he sees to government clients, and even commercial clients, making the cloud switch. Tekpros, he said, approaches the barrier through educating its clients and initiating a sort of trial run, where the government client moves just one application to the cloud to test it out. Clients usually see that the switch isn't as bad as they would have thought, he said, and they are willing to then migrate more applications once they've tested the water.

While there may be challenges now, all agreed that there was a massive opportunity for solution providers on the horizon. Nandigam said he predicts it would be another three years, definitely by 2020, before the government is going to take the full plunge into the cloud.

Cost measures, in particular, will be a driving factor, CherryRoad Technologies' Hymson said, as backlogged projects from the recession come to the forefront. Agencies will want to move quickly, he said, so cloud acceptance will come naturally as the public sector looks to cut costs. In the meantime, he said, it's about starting small with application migrations and staying nimble.

"I think the solution VARs are all over this," Hymson said. "The VARs are definitely creating solutions around it to meet demand."

Furthermore, as the "new generation of IT talent" comes to the forefront of the workplace, cloud adoption will only continue to accelerate, said Kevin Lafeber, vice president of sales and marketing at SunGard Public Sector.

"The rapid evolution of consumer technology is creating an entirely new set of expectations for business applications," Lafeber said. "We will be seeing IT directors ... who are not only totally comfortable with cloud implementations, but prefer it to on-premise solutions. For as much as cloud has become an industry buzzword, I think we have only begun to scratch the surface for implementing cloud solutions in local government environments.

PUBLISHED FEB. 7, 2014