In Cloud We Trust: Selling to Government Agencies

Spurred on by the federal “Cloud First” policy and by rapidly aging technology, government agencies at all levels have started moving certain workloads into the cloud (see “The Feds Put ‘Cloud First,'” which follows this article). However, those investments will remain stalled throughout the rest of this year and into next, according to IDC’s Government Insights unit, and for one big reason that should come as no surprise: sequestration.

The good news is that the stagnation in the federal sector should end by mid-2014 and cloud spending should take off after that, IDC said in a July 2013 report. “Investments should reach a critical mass around 2015 and beyond,” said Shawn McCarthy, research director at IDC Government Insights. “A new emphasis on cloud solutions is expected to return within the next 18 months, and private cloud investments should approach $7.7 billion by fiscal year 2017.”

This lag time could prove beneficial for channel partners thinking about adding government sales to their portfolios there’s time to prepare. Indeed, given bureaucracy’s arcane processes and stipulations, thorough knowledge is a must when bidding for any public agency’s contracts. There is payoff, though. “Doing business with the government is a lucrative, albeit complex, endeavor … well worth the effort and time if the [partner] creates a proper center of competency to achieve success,” said Kent Landry, senior consultant for cloud and data center managed services at Windstream Hosted Solutions.

To reach that point, it’s necessary to become well-versed in the sales challenges partners face when targeting government agencies, and to know some best practices for overcoming those issues.

Challenge: Targeting government agencies requires a specific skill set and understanding of the rules and parameters by which contracts are established, Landry said. In other words, partners cannot just start selling to the public sector.
Best Practices Solution: Establish a group that focuses on nothing but government sales. Hiring experts to run this unit will get your practice on the right track when it comes to a number of practical items, not the least of which is becoming a qualified bidder or securing permissions to work through a qualified bidder such as a vendor or distributor. This group further will ensure that you hone a cloud focus do you want to specialize in sales of IaaS, SaaS, PaaS or a combination thereof when it comes to government clients? Developing a specific model will keep your company from wasting time and money pursuing leads that don’t fit with your business model. Plus, this unit will see that employees undergo the proper cloud training for selling to and supporting government clients, connecting them with resources easily accessed through distributors and suppliers authorized to sell to government.

Challenge: All government agencies follow a procurement model for buying everything from pens to technology. Those strict purchasing policies make selling cloud services, in particular, harder than other services, said Diane Gongaware, vice president of U.S. Public Sector Partner at Cisco Systems Inc. That’s because the government allocates traditional telecom services, and then data center, power and IT components, into different budgets. “Cloud services aggregate these and may make procurement justification troublesome,” Gongaware said.
Best Practices Solution: When it comes to the government, sometimes the only answer is patience and dogged determination. The experts in your public sector practice must know the ins and outs of contract bidding, and have the creativity to address the roadblocks that will pop up.

Challenge: Unexpected obstacles and the inherent slowness of government buying processes make for long procurement cycles, said Chad Hodges, vice president of business development for Enterprise Network Solutions Inc., a public sector IT consulting firm in California and key CA Technologies partner. “Government is a tricky animal,” he added.
Best Practices Solution: Don’t just focus on government sales. Instead, sell to verticals in addition to the public sector. That way, your company continues to generate revenue while awaiting word on whether it’s landed government deals.

Challenge. When you do get a government sale, the real complications begin. And they start with people. “For many government technology upgrades, it may be the first such migration in some time and players will be unfamiliar with the process, unwilling to give up traditional approaches,” said Carol Whitacre, director of federal partner sales at Juniper Networks. Consider that some government employees have used the same systems and applications for careers that have spanned three and four decades. (Indeed, the FAA only now is updating its 70-year-old radar tracking to GPS.)
Best Practices Solution. Make sure the experts in your government unit are employees who not only can handle difficult technologies, but difficult people. That’s because they’ll be working one-on-one with entrenched government staff who may not deal well with change; plus, they’re all accustomed to their own work norms and methods, Whitacre said. Many of these departments also are understaffed, a circumstance that contributes to the underlying frustration over a technology deployment.

Sources recommend several tactics for addressing the situation:

Challenge. A number of government agencies in particular, those protecting top-secret data or sensitive information such as Social Security numbers harbor concerns about moving sensitive workflows into the cloud.
Best Practices Solution. The feds, aware of these fears, have crafted new cloud compliance regulations called FedRamp. (When working with state and local governments, check whether they have similar requirements.) Some of the specific objectives, as laid out on the U.S. General Services Administration website, are to increase confidence in the security of cloud solutions; ensure the consistent application of existing cloud security practices; and increase confidence in security assessments. Cloud providers must apply for security authorization, which your internal government practice should be tasked with doing. Also, expect to put many government clients on private cloud platforms, because of security concerns. Sources report using mostly private clouds and well-constructed hybrid clouds because of the need for tight safeguards. In line with that, many agencies demand that cloud providers designate physical locations for their data, often with servers inside of the continental United States, Juniper’s Whitacre said. They also will not allow the data to co-mingle with anyone else’s. “This kind of requirement may relax over time but for now, it is the only circumstance under which some agencies will consider the Cloud First approach,” said Whitacre.

Challenge. Many government systems are decades-old and run on proprietary coding, circumstances that will make cloud migrations more onerous.
Best Practices Solution. Be prepared to perform “proper architectural and automation designs while ensuring both implementation and workload automation,” Gongaware said. And because every agency is unique, as Hodges pointed out, each contract and each system will differ. There will be no one-size-fits-all solution. And, Whitacre said, “There are no shortcuts.”

Challenge. Government procurement and technical personnel are reluctant to assign projects if they can’t verify service levels, disaster recovery assurance or overall value for their cloud investments.
Best Practices Solution. Be ready to provide auditable verification that agencies’ new cloud systems are doing what was promised (or not), Whitacre said. For instance, they will check on their SLAs, she said, and they will enforce penalties when those commitments are not met or confirmed.

Again, with spending cuts enforced for the foreseeable future, channel partners have the chance to consider whether they’re up to the task of selling to government agencies. If you are, the rewards may well outweigh the problems. As Gongaware put it, “There is a lot of confusion in the market right now and that creates terrific opportunity for our partners to help public sector agencies. Because there is confusion around cloud attributes, considerations and concerns, we see customers struggling, and our partners’ professional services can be great value-adds.”

The Feds Put ‘Cloud First’

In early 2011, the White House’s first-ever CIO, Vivek Kundra, issued “Cloud First,” which mandates that agencies consider cloud platforms for IT requirements before other options. The reason is threefold: as-a-service models move capex expenses to the opex budget, cutting down on wasteful spending; cloud deployments tend to move faster than their legacy counterparts, making better use of taxpayer money; and, throughout the United States, government systems remain woefully outdated, and cloud keeps applications current without relying on too much new and expensive infrastructure.

To be sure, the White House had attached some timelines to Cloud First but sequestration has hindered many of those efforts. Nevertheless, the intent of Cloud First to “catalyze a fundamental reform of federal IT, which is essential to improving the effectiveness and efficiency of the federal government,” as Kundra wrote in a December 2010 blog remains top of mind among government agencies, and their vendor and channel partners.

For instance, the Treasury Department has opted for public and hybrid cloud, according to IDC, while the Social Security Administration is the private cloud leader. Meanwhile, the Justice Department stands as the top consumer of “community cloud,” a multitenant infrastructure shared among specific organizations. Here are some of the cloud projects deployed so far, as highlighted in the IDC report: