Watchdog Wants to Know if DOD Has Actually Saved Money by Jumping to the Cloud

Last month, the Defense Department inspector general published a hard-hitting report questioning the structure and execution of the department’s cloud computing strategy.

Now, auditors are putting DOD technology officials on notice that they’re already beginning another probe of the agency’s cloud efforts.

The message of the new report: Show us the money.

A Dec. 9 letter from Carol N. Gorman, assistant IG for readiness and cyber operations, said the audit aims to determine whether DOD components actually performed cost-benefit analyses before acquiring cloud computing services and "whether those DOD components achieved actual savings as a result of adopting cloud services.”

The memo is addressed to the undersecretary of defense for acquisition technology and logistics, the DOD chief information officer, the director of the Defense Information Systems Agency, and the commanders of U.S. Cyber Command and U.S. Strategic Command.

A cost-benefit analysis would include data relevant to a component’s return on investment: current IT spending compared to estimated spending offered through various cloud service providers; performance metrics; energy savings and a slew of other data sets. A cost-benefit analysis puts numbers to the cloud, which for all its fame as an IT driver remains a somewhat nebulous term. In addition, a cost-benefit analysis also serves as a baseline for determining the success of any cloud-computing deal.

Cloud computing is traditionally associated with improvements in IT efficiency and cost savings for enterprise IT organizations in both the private and public sectors. Instead of building and managing their own energy-chugging data centers, organizations essentially rent a range of services such as storage, compute or analytics from cloud service providers in the cloud – which are just the cloud service providers’ data centers.

The logic most organizations follow is that purchasing IT as a service makes sense as security concerns continue to be addressed through various initiatives. The DOD IG, however, wants to make sure component agencies are doing their homework before they jump to the cloud. If they haven't, the DOD IG isn’t likely to mince words, despite the Pentagon’s continued efforts to retool its cloud strategy.

Jack Moore contributed to this report. 

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