Cloud Hosting Article

The Department of the Interior (DOI) is serious about the cloud. The government agency is set to sink as much as $10 billion into cloud services through a set of 10 competing contracts with heavyweights such as IBM (News - Alert) and Verizon.

Ten companies have signed indefinite delivery, indefinite quantity (IDIQ) contracts with the DOI, with each contract valued at around $1 billion. The 10 companies are IBM, AT&T, Verizon, Unisys, Lockheed Martin, Aquilent, Smartronix, CGI (News - Alert) Group, and Autonomic Resources and Global Technology Resources.

The DOI is banking that although the contracts could amount to up to $10 billion, the move to the cloud still will bring a cost savings. The DOI estimates that it will save $100 million a year between 2016 and 2020 in IT costs with the new cloud model, according to Andrew Jackson, deputy assistant secretary for technology in the DOI's Information and Business Services.

The approach that the DOI is taking to acquiring cloud services is as significant as the buy itself.

Contracts done in the IDIQ style provide for an indefinite quantity of services or suppliers for a fixed period of time, according to an article on the move by InformationWeek. The DOI will compete individual projects among the awardees, and then assign them via task orders, one for each project. This competition will result in more competitive innovation offerings and speed up the award process.

"The Department of the Interior has really moved out very aggressively and creatively" with its approach to the cloud, noted Anne Altman (News - Alert), IBM's general manager for U.S. Federal, as reported in InformationWeek.

"Cloud computing is not just about the hosting; it's about the deep skills and services to support agencies,” she added, “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."

Unisys (News - Alert) won the first task order. The company has begun transitioning DOI's financial and business management system to the cloud. The system is based on SAP's ERP software platform and is used throughout the department to account for all income and expenditures. The project will run up to fie years and is worth roughly $44 million.

"This is a change we've been eager to make for a while,” noted Jackson.

The cloud hosting award was on hold until recently, when a contract protest was dismissed by the U.S. Court of Federal Claims, he explained.

"Now that we can finally move forward with these contracts, we're expecting significant reductions in hardware, software and operations costs to the taxpayer," he said.