Cloud Illusions and Confusion: The Fog of Wasteful Government IT Spending

"I've looked at clouds from both sides now,
From up and down, and still somehow,
It's cloud illusions I recall,
I really don't know clouds at all."

~ Joni Mitchell, 1968, Both Sides Now, ©Sony/ATV Music Publishing LLC

While I've never looked to Joni Mitchell for technology insight, you have to give her this one. 20+ years later, the only improvement to be made in her lyric might be a change to "I really REALLY don't know clouds at all." And the Obama administration isn't helping any.

A radical shift is underway with respect to business application software -- its technical language and architecture, development methodology, deployment and business model. This trend -- the model first surfaced in the past decade and was widely recognized when went public in 2004 -- is generally referred to as "cloud computing" or "Software as a Service" ("SaaS). SaaS offers major gains in efficiency, labor savings, and dramatically lower costs to develop, deploy and maintain IT systems.

But if the federal government is to benefit from this shift, it is essential that its IT leadership be fully committed to the effort, absolutely clear on the actual model requirements and equally consistent on supporting correct models as well as cutting off attempts to fund or support projects not consistent with the objective. After a promising start on the vision, unfortunately the administration is ultimately failing badly in the execution.

After the government wasted billions on failed IT in the 1990s, and continued to do so through much of the past decade, the situation was succinctly described as, "Our track record is clear -- we are not very good at delivering our own software in the time frame set," said Karen Evans at the SaaS/GOV conference 2008. At the time Evans was the administrator of the e-Government and IT for the Office of Management and Budget and head of the Federal CIO Council. "We're also not very good at managing large projects. Some agencies haven't embraced the service approach, often because they want hands-on control of software development. But government agencies can't afford to keep developing their own software."

Enter the Obama administration.

The administration correctly described the overarching problem we face as a "technology gap" between the private and public sectors that "results in billions of dollars in waste, slow and inadequate customer service, and a lack of transparency about how dollars are spent."

Enter Vivek Kundra, CIO of the United States and champion of cloud computing and SaaS. "I'm all about the cloud computing notion," Kundra told the Wall Street Journal in May 2009. "I am killing projects that don't investigate software as a service first."

Three months later Kundra announced the Federal Cloud Computing Initiative (FCCI), which he stated "has the potential to greatly reduce waste, increase data center efficiency and utilization rates, and lower operating costs." He was right.

But while the Obama administration has spent the past two years putting out report after report, sounding the horn and talking the talk of bringing technological change to the way government works, the progress is meager on all fronts.

In fact, the administration's much-trumpeted open government initiatives -- including IT Dashboard,, and (a site for easy purchases of cloud solutions) -- will be shut down within the next few months because of a lack of $32 million in funding. Additionally, the Office of Management and Budget will shut down internal government sites, including FedSpace and efforts relating to the FEDRamp cloud computing cybersecurity effort, according to reports.

So much fanfare, so much promise, so what's the problem?

The administration has not clearly identified the cloud solution it wants. The FCCI did not provide clear definition and direction. The "cloud" is a metaphor for the Internet. It is a style of computing in which IT-related capabilities are provided through SaaS allowing users to access technology-enabled services from the Internet without having to demonstrate knowledge or expertise with the technology infrastructure that supports them or the computing code that allows it to function. But not all cloud solutions are created equal.

Microsoft has identified four "maturity levels" to the development of SaaS. Level 1 has each customer with its own customized version of the hosted application. Level 2 is configurable, providing greater flexibility so that many customers can use separate instances of the same application code and the vendors to meet the different needs of customers. Level 3 is also configurable but adds multi-tenancy for a single program to serve all customers.

Level 4, and the level that the Federal government desperately needs to prioritize as its end state, is scalable, configurable and multi-tenant efficient. A system's capacity can be increased or decreased to match demand simply by distributing and balancing load among its servers. It's an architectural choice, not just consolidation of existing platforms. The government, if it so chooses, can easily and effortlessly go directly to Level 4 and leapfrog the increments that detract from optimized performance.

But it hasn't chosen, and the FCCI's lack of a concrete definition of the type of cloud solution the administration should mandate has led to the "faux cloud," purely traditional government IT investments -- part of $80 billion budgeted annually to manage some 10,000 different government systems -- and leaves the agencies continuing to waste billions of taxpayer dollars.

The standard agency reaction of retrenchment was called out as more of the same old, same old by Michael Lee, an FCCI program management contract employee from SRA-Touchstone.

On March 22, Lee posted on the General Services Administration blog site that agencies are creating private clouds "no different than previous legacy-based infrastructure architectures" that are inoperative. Lee goes on to state, "Worse yet, these servers may be powered up and utilized at 0 percent, which, yes, has happened and is happening in the Federal government as I write this."

Mr. Kundra and OMB need to stop ignoring, and by silence supporting, agencies subverting the cloud initiative. Everything OMB supports stops at SaaS Maturity Level 1 -- and that's just a new definition of waste and inefficiency. And Mr. Kundra and OMB have been mysteriously silent with respect to some departments and agencies initiating and continuing internal software development projects where readily available commercial cloud alternatives exist. In particular, the Departments of Veterans Affairs and Homeland Security, along with the Office of Personnel Management, seem to have gotten a pass from Mr. Kundra's vow to kill non-cloud projects.

During the past two years, the VA has consistently ignored readily available commercial solutions for various claims processing systems, choosing instead the time-consuming, more expensive route of internal development, in one case hiring IBM to teach VA software developers how to create the system from scratch.

Homeland Security appears to be equally determined and permitted to pursue a technology path that is off-strategy with the administration mandate. In recent months DHS issued human resource IT solicitations requiring solutions be hosted only on DHS servers.

While both the VA and Homeland Security claim they have cloud computing solutions and applications, all each agency is doing is having the application hosted at a joint data center, including a wholly Federal-owned data center.

And OPM -- which now aggressively markets "Talent Management Services" under the remarkable banner "workforce solutions by government, for government" -- has been allowed to do internal development of its USAJobs website, with the full support of OMB, at a cost of tens of millions to taxpayers. The service was and is readily available from commercial vendors at greatly reduced costs.

OPM's astonishing stated goal: Just recreate the functionality that exists in its current system, provided by Monster Government Solutions -- not make it better, not improve the applicant experience, not increase efficiency -- just make it "government owned" by replicating every line of the code that already exists in the commercially provided system.

It's worth noting that DHS and the DoD are helping OPM fund this internal development by shipping their appropriated funds via intragovernmental fund transfers to OPM -- funding an albatross that has nothing to do with their Departmental mission, much less the purported initiative to go to the cloud.

The notion of "government-owned" has a life of its own. When the government arrogantly perceives that it is in competition with the private sector -- and abuses its right to taxpayer funds in order to compete with the private sector -- it's a very serious problem. Complicating the administration's lack of clarity in its cloud mandate is its "insourcing" initiative, which was originally intended to examine the cost of internal versus external service delivery for citizens. Insourcing has become a cover for beefing up budget and creating redundant layers of bureaucracy. It's also the new way to spin wasteful spending, as demonstrated by DHS and DoD announcing programs to hire tens of thousands of new full time IT employees.

Equally indefensible waste -- OMB prohibiting certified human resources line of business private sector payroll processing providers from competing with current Departmental SSC's despite a clear price advantage to private providers of 50 percent (which means agencies are collectively required to spend at least $2 billion in taxpayer dollars intended to support their own missions).

There are some beacons of hope -- and brilliance.

The U.S. Equal Employment Opportunity Commission announced in March it was turning to Global Computer Enterprises for a cloud-based solution for Federal financial management service after years of relying on the Department of the Interior's National Business Center. The GCE contract has options for up to five years and $10 million and represents substantial cost savings over its former government solution.

In December, the U.S.D.A. and Microsoft announced a deal where the agency would move its 120,000 employees to the software giant's cloud-based Microsoft Online Services, consolidating 21 different messaging and collaboration systems into one.

SaaS solutions are cost-effective, agile, responsive and innovative when provided by experienced companies providing quality software platforms. It's time for the administration to stop the status quo from corrupting its "cloud first" strategy for federal government IT.

Linda E. Brooks Rix is co-CEO of Avue Technologies, a public sector human capital management solutions platform provider headquartered in Tacoma, Wash., and offices in Washington, D.C. Avue's flagship solution, Avue Digital Services® is a "Level 4" fully hosted solution that has been in production since 2001 with a 99+% uptime.