Navy to Ditch NMCI for Microsoft in Cloud Email Pilot

The Navy has decided to run a pilot of Microsoft cloud email for its reserve forces as an alternative to email on the Navy Marine Corps Intranet after determining it could save hundreds of millions of dollars over five years with the company.

The Space and Naval Warfare Systems Center Pacific said in contracting documents that running Naval Reserve Forces Command email on NMCI would represent a net cost increase of $286.4 million over five years, while the cost of using enterprise email offered by the Defense Information Systems Agency would be $55.3 million over five years.  

NMCI will transition to the follow-on Next Generation Enterprise Network next month.

SPAWAR Pacific said using Microsoft Office 365 would save $16.9 million over five years, but did not disclose total costs.

The costs of the one-year pilot with 8,000 reservists and two one-year options for Microsoft's cloud e-mail is about $2.93 million, SPAWAR said. Google for Government services, which the Navy also examined, would cost only $300,000 more over five years, but the ability to integrate Google with NMCI is unknown, SPAWAR Pacific said.  

In May 2013, DISA signed a cooperative research agreement with Google covering cloud services and currently has a cloud pilot with the company that runs through November.

The Navy will buy the Microsoft cloud services off the General Services Administration's cloud blanket purchase agreement for its pilot. Defense agencies are only authorized to use cloud services in conjunction with an authorized pilot.

Cmdr. Charlie Summers, a spokesman for the reserves, said the service chose the Microsoft cloud email because it is available on the GSA schedule. NGEN does not offer cloud services and it is not economically feasible for the reserves, he said.

SPAWAR Pacific conducted a business case analysis of all three cloud email systems, and determined Microsoft not only delivered best value in terms of cost but that it "overall exceeds the functional and technical requirements for the project…and provided the most significant benefit, particularly in the areas of efficiency, sustainability and reliability.”

Marlin Forbes, a technology consultant who previously worked as senior vice president of Verizon Federal, said the low cost of Microsoft cloud email compared to NMCI and DISA “is a pretty damning indictment” of the latter.  If the cost comparisons are accurate, the Navy stands to “save a lot of money,” Forbes said.

SPAWAR Pacific said the Microsoft pilot is part of a larger group of commercial cloud pilots within the Defense Department, including unspecified Navy pilots with Amazon Web Services, which provides cloud computing to the intelligence community.

When the Microsoft Cloud email pilot is completed, DISA and the Navy’s chief information officer will compare the results to other DOD cloud email pilots.

In a conference call with reporters today, DOD’s acting chief information officer, Terry Halvorsen, said DISA’s assessment will include whether cloud pilots meet security standards for DOD use.

"It gives us good industry data on who are the interested players in supporting a commercial cloud solution that meets DOD's security requirements and, frankly, meets our financial requirements," he said.

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