DHS Unveils Enterprise Multi-Vendor, Multi-Cloud Strategy

The Department of Homeland Security will embark on a 10-year, enterprise-wide cloud computing initiative to modernize its technology infrastructure and improve its cybersecurity posture, according to a Feb. 19 announcement.

The program calls for retiring one of two DHS data centers, migrating a majority of its IT systems and data to the cloud, and optimizing operations across the department’s on-premises and cloud infrastructure. The program could be worth a combined $1 billion to $2 billion for multiple cloud vendors over the next 10 years, according to a Bloomberg Government analysis.

According to the attached request for information, DHS’s priorities for its enterprise cloud program include:

• Enabling a faster, more efficient, and lower-risk approach to IT modernization;
• Taking advantage of cost savings by shifting to an on-demand computing model;
• Achieving a proactive cybersecurity posture through the use of instrumentation, shared security operations, and analytics; and
• Providing a common framework to leverage market-based innovation through a vendor-neutral, multi-cloud, hybrid approach.

Migrating to the cloud will also help DHS agencies improve user experience for both on-site and mobile users; increase adoption of continuous monitoring and automated application delivery tools (e.g., DevOps); and streamline subsequent network modernization initiatives under Enterprise Infrastructure Solutions (EIS); according to the RFI.

Leading DHS’s strategy is a Cloud Steering Group (CSG) chaired by Undersecretary for Management Claire M. Grady and senior technology leaders from such DHS agencies as U.S. Customs and Border Protection (CBP) and the new Cybersecurity and Infrastructure Security Agency (CISA).

Homeland in the Cloud

Although the scope of DHS’s ambitions may resemble the Defense Department’s Joint Enterprise Defense Infrastructure, or JEDI, cloud program, its approach will be radically different. Where JEDI will be a centralized cloud that provides the bulk of the Pentagon’s infrastructure-as-a-service needs, DHS’s steering group is opting for a more federated approach that relies on multiple vendors and hybrid systems capable of running in both on-premise and cloud environments.

“Different components have different needs,” DHS chief information officer John Zangardi told attendees at a May 2018 industry day. “We don’t want a hundred, but this will be a hybrid strategy that will allow for multiple players.”

As part of the plan, the CSG will allow DHS’s Data Center 2 program to expire at the end of June 2020. That program now supports 133 DHS systems and 8,000 devices and has generated $415 million for Perspecta Inc. since fiscal 2015. Of the 133 systems Data Center 2 supports, DHS intends to migrate more than half to the cloud, shift 13 percent to a different on-premises data center, and decommission another 5 percent. Decisions on the remaining 30 percent have yet to be reached.

To acquire new cloud services, DHS will balance its use of “Best-in-Class”governmentwide contracts, such as Schedule IT-70, Alliant, and CIO-SP3, with a portfolio of stand-alone IT services contracts with a specialized, targeted scope, according to the announcement. This comes after DHS announced it would not issue a third iteration of its Enterprise Acquisition Gateway for Leading Edge Services, or EAGLE, IT contract vehicles in December 2018.

In fiscal 2018, DHS agencies obligated $262 million to cloud services, according to Bloomberg Government data. The top recipients of DHS cloud spending that year were Leidos Holdings Inc. ($36.5 million), Perspecta Inc. ($21.2 million), Accenture PLC ($19.4 million), and General Dynamics Corp. ($17.5 million).

As of December 2018, DHS agencies had migrated or were in the process of migrating 26 percent of their systems to the cloud, up from about 22 percent at the beginning of 2018, according to the RFI. DHS plans to continue these migration efforts in fiscals 2018 and 2019 and accelerate them as part of this larger cloud initiative.

Some DHS components had already started building their own cloud infrastructures and migrating their IT systems to the cloud, and the CSG will help align these efforts across all of DHS. The CSG’s federated approach means that DHS agencies will have the flexibility to select from a wider range of cloud providers and migrate assets on their chosen schedules, with the CSG responsible for enforcing common standards, sharing best practices and reusable tools, and addressing barriers to integration.

Nevertheless, current DHS agency-led cloud programs will probably be put on hold pending progress on the larger initiative. For example, CBP released a solicitation for Cloud Migration for OIT National Data Center in February 2018. CBP hasn’t yet released a request for proposal, making it likely that the project is being consolidated under this new DHS-wide cloud migration solicitation.

BGOV’s Take

The contract will probably be valued at between $1 billion and $2 billion, based on the scope of the work being migrated from Data Center 2 to the cloud and the numerous additional requirements listed in the RFI.

First, DHS’s enterprise cloud contract will take on more than half of the functions currently performed on the $100-million-a-year Data Center 2 IDIQ contract. Over 10 years, that alone could represent $500 million to $1 billion in spending.

Beyond the Data Center 2 work, the enterprise cloud contract will entail significant up-front costs to plan the department’s cloud migration and reformat applications to be hosted in the cloud. Finally, the contract will also pay for optimizing Data Center 1, both in terms of migrating the remaining Data Center 2 applications that will remain on-premises and upgrading security and other features. These costs will add up quickly.

Bloomberg Government expects DHS’s enterprise cloud strategy to receive considerable interest from the government contracting community. Not only will it be one of the government’s largest cloud computing contracts to date, but it would also provide a road map that differs from DOD’s JEDI strategy, showing how a large agency can execute an enterprise-scale digital transformation.

Chris Cornillie and Laura Criste are federal market analysts with Bloomberg Government.

To contact the analysts: Chris Cornillie in Washington at ccornillie@bgov.com; Laura Criste at lcriste@bgov.com

To contact the editors responsible for this story: Daniel Snyder at dsnyder@bgov.com; Jodie Morris at jmorris@bgov.com