According to a Federal Computer Week article by Frank Konkel, The Department of Veterans Affairs terminated its five-year, $36 million cloud computing contract for email and calendaring services with Hewlett Packard Enterprise Services.
Citing a material change in the agency’s requirements, VA officials declined to elaborate on the requirement changes that were actually made. Although I have no personal connection or first hand knowledge of the specifics of this deployment, this failure was apparently caused by failure to first build and understand the business case for supporting the cloud transition.
“In November — after the agency announced its cloud deal with HP Enterprise Services – VA’s Deputy CIO for Architecture, Strategy and Design, Paul Tibbits, told an audience at 1105 Media’s Enterprise Architecture Conference that he questioned the cost-effectiveness of moving to the cloud.
Tibbits was not discussing this project in particular, but rather stressing the broader need for real use cases and hard-nosed business assessments. “It is not 100 percent clear that expenses go down if we jump into the cloud,” he said. “The revenue stream is up there in neon lights, we have got to figure out if that is going to save us money or not.”
Cloud computing is not about technology. It is primarily a change in the delivery and consumption of information technology services which can radically change an organizations business model. As highlighted in many expert guides, including my book “GovCloud: Cloud Computing for the Business of Government“, the first step in any cloud transition strategy should be the identification, development and commitment to the cloud computing business model.
I also believe that there were at least two other contributing factors to this unfortunate action:
- Failure to first establish and specify infrastructure security requirements for the software-as-a-service offering. Although FedRAMP is not mandatory until 2014, it provides an efficient and repeatable methodology for establishing a common cloud computing security baseline for all federal agencies
- Failure to adequately address cultural and change management challenges associated with the cloud computing business model. If the new business model wasn’t firmly understood and communicated throughout the organization with a focused change management process, success would be very difficult to achieve.