DISA chooses pay-per-use approach for servers

The Defense Information Systems Agency is using a pay-per-use method to supply and manage servers for its data centers under four contracts that could be worth as much as $700 million in the next eight years.

The five contracts are divided among four companies -- Apptis, Sun Microsystems, Vion and Hewlett-Packard, which won two awards.

The four vendors will provide hardware, maintenance and support for servers at 17 large DISA data centers in the United States and one in Germany. The companies will charge DISA for all work on the servers, including the boxes themselves, on an hourly use basis.

“This is really a utility computing solution where you only pay for what you use,” said Tom Syster, Sun Federal’s DISA client executive. “The computing world is going to go the way electricity does, and eventually you’ll buy computing cycles out of the wall.”

The contracts guarantee each vendor a minimum of $200,000, but DISA anticipates fees in the millions, according to an agency spokesperson.

Sun has compiled a single hourly usage rate to cover all costs, Syster said. Each company will retain ownership of the hardware, whereas traditionally the agency would have ownership, he said.

DISA’s approach is unique in the federal market, but it has distinct benefits, said Anthony Robbins, Sun’s vice president of federal sales. The utility approach allows organizations to pay as they go, making for easier budgeting and more flexibility in serving end users, he said.

The contracts were competitively bid as service contracts based on a best-value comparison that considered solution and price, Syster said. Sun has a $125 million ceiling on its award under the contract, which has an initial period of five years and three one-year options. DISA will place its first contract order within 60 days, he added.

Each company will manage different operating environments, according to notices on the Federal Business Opportunities Web site. Sun will manage the Solaris operating environment, Vion will be in charge of the IBM AIX environment, and Apptis will run IBM’s z/OS and z/VM. HP will manage DISA servers operating in the Microsoft Windows, Red Hat Linux, Novell Suse Linux and HP-UX environments, the notices state.

Right now, DISA runs about 5,000 servers, of which about 25 percent of those servers operate in Sun’s Solaris environment, Syster estimates.

In July, DISA used the fee-per-use approach to acquire collaboration tools for its Defense Knowledge Online Web portal. The agency awarded the $17 million contract to IBM for its Lotus Sametime suite, but told the company that it would be paid only as users access the applications.

DISA intends to award a second contract for collaboration tools soon and will set that application opposite Sametime on the DKO home page to foster competition between the programs, DISA officials said.