Tags: feds | spend | cloud

Rick Amato: Feds Need to Spend Wisely on the Cloud

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By    |   Monday, 01 October 2018 08:33 AM

Members of Congress have many responsibilities. But perhaps the greatest is the power of the purse. The Constitution says only lawmakers can decide how federal money will be spent.

Meanwhile, though, federal agencies all ask for plenty of money. Sometimes that’s wasteful; often times it’s crucial. It’s up to lawmakers to make sure the requests are sensible.

Let’s consider military spending, since that’s the most important thing the government does.

Everyone wants to defend the country. That costs money. But if the Pentagon wastes money on needless projects, it’s not helping the people in uniform. Right now, there’s a movement afoot to waste a bunch of money on JEDI, a program to move Pentagon data to the cloud.

No, it’s not the move that’s wasteful. It’s the fact that somebody in the Defense Department wants to award the entire cloud contract to a single provider. “A fragmented and largely on premises computing and storage solution forces the warfighter into tedious data and application management processes, compromising their ability to rapidly access, manipulate, and analyze data at the home front and tactical edge,” the Pentagon announced in a statement.

Except: managing multiple cloud providers isn’t that complex. In the real world, “Multi-cloud is becoming the rule, not the exception,” Forbes magazine reports. “Studies show that, among companies leveraging the public cloud, 56 percent of enterprise respondents are using multiple SaaS vendors.” Some companies even run ads in major magazines explaining how to use multi-cloud.

The JEDI cloud program would be very lucrative for a single provider. It’s a $10 billion award that could stretch 10 years or longer. That’s one problem: By locking in a single provider it would strangle competition. By strangling competition, it would raise prices. That’s another problem.

Oh, and it feels like cronyism.

In the defense community, computing providers speak openly about how this deal is tailor made for Amazon Web Services. No other provider meets all the criteria the Pentagon listed – almost as if they were designed to guarantee that AWS would win the business. That’s simply not fair.

We are lucky that lawmakers seem to have caught on. When they passed the massive military spending bill this year, they added important language telling the Pentagon to rework its cloud computing requests.

They won’t approve any cloud spending until Defense Secretary James Mattis provides transparency and explains how he intends to drive competition in the cloud computing space. They also want to see multiple cloud providers have an opportunity to bid and develop new technology.

Of course, that is all accomplished very easily: allow for multiple cloud contracts. A number of short-term agreements would, in an instant, boost competition. That would drive down prices. It would also trigger creativity. Think of it this way: ten years ago, nobody had heard of the cloud. Ten years from now, who knows what technology we’ll be using? The Pentagon shouldn’t block potential inventiveness with a long-lasting deal.

There’s plenty of cronyism in Washington, D.C. That’s partly why Donald Trump won the presidency. Amazon founder Jeff Bezos may criticize Trump if he wants to. And since he owns the local D.C. newspaper, he’s got plenty of chances to do so. But it’s hypocritical for Bezos to be blasting the president while his company seems to be benefiting from insider-D.C. style dealings.

Lawmakers are aware of the potential wastefulness, and they’re doing what they can to push back. We should all hold them to it, and demand an open process that meets the Pentagon’s needs while saving money. That’s the way to drain a swamp.

Rick Amato, is a former financial adviser for Merrill Lynch and founded the Amato Wealth Management Group. He is currently the host of Politics And Profits with Rick Amato, and co-hosts Jobenomics America TV. Find out more at amatotalk.com.

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Lawmakers are aware of the potential wastefulness, and they’re doing what they can to push back. We should all hold them to it, and demand an open process that meets the Pentagon’s needs while saving money. That’s the way to drain a swamp.
feds, spend, cloud
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2018-33-01
Monday, 01 October 2018 08:33 AM
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