Cloud Contracting Trends at the Department of Homeland Security

Posted by Alexander Rossino on February 16, 2018

Cloud Storage Wars

The Department of Homeland Security (DHS) is among the leading agency adopters of cloud computing, a trend that appears to have remained steady in fiscal 2017, based on spending by the agency that Deltek has been able to identify.

As shown in the chart below, DHS spent $167M on cloud capabilities and related services in fiscal 2017. This represents a decline of 36% from reported cloud spending by DHS the year before, but still significantly higher spending than in fiscal 2015.

Identifiable spending on cloud in fiscal 2017 differs from the $155M that the DHS told the Office of Management and Budget it intended to spend in its budget request for that year. That the total identified by Deltek from reported contract data differs from the number given to OMB is not surprising. Federal agencies routinely provide spending estimates that differ with final tallies. Why this is the case remains a mystery, but it probably has something to do with IT shops not having a good handle on which procurements are specifically for cloud-based services. After all, if it doesn’t have “aaS” in the requirement it can’t be cloud, right?

Turning to the top earning cloud vendors we find both large and small businesses. JHC Technology, for example, earned the highest total at DHS in fiscal 2017 and it is a Service Disabled, Veteran-Owned, Small Business.

What services did these vendors provide? Here are the top efforts by spending for each of the top 5 vendors.

Here we have evidence of the influence of resellers in the government cloud market. JHC is a consultancy, but the work it won as a prime was for helping the DHS utilize Amazon Web Services’ cloud infrastructure capabilities. The same holds true for Blackstone Technology Group, which partners with both Oracle and Microsoft. Its “Public Cloud Services” win was actually to provide DHS with access to one or both of those vendors’ capabilities. In other words, the big commodity cloud providers are well represented at DHS despite not appearing as primes.

For fiscal 2018, DHS reported to OMB that it intends to spend approximately $104M on cloud. Of that total it estimates $35M will go to capabilities and services provided by public cloud providers. If fiscal 2017 is any indication, however, that estimate will turn out to be an understatement.

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