CEO Insight: Contending with the New Normal in Public Sector
This is part one of my mid-year DLT State of the Union.
We’ve reached the halfway point of 2013, which also signals the beginning of the federal fiscal year end (FFYE). This is a good time to take a second and survey what we’ve seen so far and what we can expect over the next six months.
This year has been rough. With sequestration in full effect and decreased or stagnant budgets, agencies are seemingly reluctant to spend the money necessary to keep up with their growing IT demands. Furthermore, funding challenges in the federal sector have resulted in partially funded support contracts and shorter-term renewal periods. The addition of employee furloughs and delays in obligating funds puts significant stress on the procurement departments and procurement process in general.
Successes So Far
Despite the challenges, things aren’t all bad. Critical government mandates and initiatives like Cloud First, FedRAMP, FDCC, and cybersecurity enable IT departments across the government to create a more efficient and effective government. The mandates and initiatives will continue to keep IT spending a top priority. As a result, IT was not as severely impacted as other federal programs.
In addition to a slightly smoother outlook, we’ve won big contracts – a few record breaking for DLT – within the last six months. One of those is the recently awarded, $227 million purchase agreement with the Department of the Navy (DON) for Oracle products. It’s estimated the DON will save $60 million due to this agreement.
The media and our partners have also recognized us. We were named Red Hat’s Public Sector Virtualization Partner of the Year, while Google recognized us as their North American Partner of the Year for Google Maps for Business – Large Accounts. CRN named us one of their 10 VAR Cloud Computing Superstars and we maintained our place in the top 50 of their Solution Providers 500 list. Lastly, we were included in Washington Technology’s Top 100.
We also expanded our top-notch storage and enterprise data management professional services to include Oracle core technologies, E-Business suite, identity management, and value-added applications. And we named Don Simpson VP of the division.
Storage: Cloud, Data Center Consolidation, and STaaS
Cloud computing and big data are solutions the federal market is still trying to get a handle on; and data center consolidation continues to prove difficult.
Our partner, Amazon Web Services (AWS), recently gained FedRAMP compliance for its GovCloud. This Authority to Operate makes it easier for agencies to run their FedRAMP required workloads on AWS. Additionally, the CIA recently succeeded in procuring AWS through a 10-year, $600 million deal, giving them its seal of approval in the process.
Earlier this year, we successfully added AWS to our GSA contract. Combined with our ECS III contract, customers can now purchase instances more cost effectively, while simplifying billing and usage.
We continue to see data center consolidation under the Federal Data Center Consolidation Initiative. That will continue to impact the federal government as additional data centers have recently been found at the midpoint of the FDCC's efforts. It will also keep driving the adoption of cloud architectures and virtualization.
While many fellow VARs may see this trend as damaging, we see an opportunity. In partnership with NetApp, we’ve added a Storage-as-a-Service (STaaS) solution offering to our portfolio. STaaS combines hardware, software, and implementation and support services for a dedicated, on-premise solution with a variable, pay-as-you-go model requiring zero capital investment.
Times, They Are a Changing
The government business is changing. As I’ve outlined above, so are we. These changes will make us smarter, more flexible, and will open doors to new opportunities.
The analogy to a stormy sea is easy to associate with the public sector market today. It’s also apt to remember a quote from one of the greatest books on seas, The Old Man and the Sea: “Now is no time to think of what you do not have. Think of what you can do with what there is.”
Although there are those of us who’ve been around long enough to be nostalgic for what was, the time is not right for reminiscing. There’s a “new normal” in the public sector IT industry. I believe the efforts we are putting in to ensure DLT Solutions reflects these changes are benefiting our customers. It’s for them that we’re doing this, and with our successes so far in 2013, we feel they appreciate it.
In part two of my DLT State of the Union, I’ll be exploring cybersecurity, fiscal year ends, and finances.
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