Public Cloud Services Acquisition Strategies

We believe that it is important to differentiate the Cloud computing industry model from traditional government data center procurements. Because of this differentiation, A&T has several best practices it recommends based on its past experience:

  • The optimal contracting strategy will enable the government to benefit from the cost efficiencies empowered by Cloud computing. This would include taking advantage of elastically scaling up and down resources and pricing models that provide on-demand, reserved, and fixed pricing options. Such an approach can empower users with the computing resources they need, to include unforeseen spikes, in the most cost effective manner.

    This can be a challenge for cost certainty, but the ideal contracting approach can create unit boundaries that still provide utilization flexibility. A possible approach is to develop a Contract Line Items (CLINS) with ceiling funding for “Cloud Services” at a high level as opposed to trying to specify unique CLINS for specific services. This provides users the flexibility to draw down funding off the contract to access the specific services they need while still providing overall cost certainty.

  • An optimal contracting strategy will recognize that each Cloud service provider will have different technical specifications and price its offerings in a variety of ways. This strategy can be challenging when attempting to make “apples to apples” evaluations, but requiring overly restrictive standardized or homogenized pricing models can limit access to the full range of Cloud service providers. We suggest a contracting approach that evaluates pricing in the overall context of the offering range and how well these offerings meet your needs in a cost effective manner.

The ideal contracting approach will recognize, promote, and capitalize on the continual insertion of innovation from Cloud service providers. The contract should support the full service offering and not be limited to basic compute and storage at a point in time.

As new services launch, the contract should enable your users to use the vehicle readily to access them. This may be an acquisition challenge, but a sound master contract can support such innovation.

  • —The contracting model should reflect the shared responsibility of the government, its system integration partners, and the Cloud service provider—including topics such as application security; SLAs; and application, database, and OS maintenance.

    Cloud service providers are most typically responsible up to the hypervisor level, with government having its staff (and possibly SI partners) develop higher level SLAs and security requirements.

  • —Cloud computing and storage solutions are evolving very rapidly in the commercial marketplace. In particular, part of the value derived from Cloud computing and storage service providers is the speed with which offerings are developed, deployed and revised to meet expanding needs.
  • —The commercial marketplace is driving advances in this sector. By using a single, streamlined set of instructions with terms and conditions that are, to the maximum extent practicable, consistent with customary commercial practices, the government can capitalize on the rapid pace of innovation in commercial Cloud computing and storage services.