Cloud Players: Who’s Who in the Government Market

A quick Internet search will reveal who the biggest cloud providers in the marketplace are. One could even find out which companies sell the most to the federal government. When it comes to the foundation of cloud computing — infrastructure as a service (IaaS) — a Gartner report from August 2016 puts Amazon Web Services and Microsoft far ahead of the rest of the pack. Other big, established tech providers like Google, IBM and Oracle are jockeying for IaaS market share as well.

But the big players in the state and local government market is a very different beast. This is a piece of the cloud pie that hasn’t received much attention — yet.

Using purchase order data from SmartProcure (2012-2017) and state term request for proposal data from the Center for Digital Government (contracts active from 2015-2017), we hunted down cloud vendors serving thousands of agencies across the country. We focused solely on state and local government entities, excluding education, and homed in on IaaS and platform as a service. Because many purchase orders and RFPs include multiple services, it wasn’t possible to wholly exclude software-as-a-service purchases from the results. Additionally, the data isn’t comprehensive — it merely provides indicators of market leaders.

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Perhaps the most significant takeaway is that government tends to go to third-party vendors for cloud services, rather than approaching cloud companies like Amazon, Microsoft or Oracle directly. Those companies did have contracts with government entities, but not nearly on the scale of IT companies that offered to manage their services for government customers.

In other words, if one were to pick a cloud purchasing agreement at a state or local government entity at random, they would be much more likely to find a company like CDW implementing a solution based in Microsoft Azure than they would be to find a contract between that government and Microsoft.
By cross-referencing the lists, we found four companies that appeared in the top 10 for both contracts won and the total dollar value of those contracts. They were: Carahsoft Technology Corp., CDW, Dell and SHI.

Breaking it down strictly to the dollar value of POs, and excluding companies in the previous list, other big players include Identity Automation, Northwest Regional Data Center, Oracle, Ernst and Young, SAS Institute and SoftwareONE.

When looking at the quantity of POs, the list grows to include Safer Network Solutions, Amazon, Barracuda Networks, Visa and AT&T.

Another insight to come from the research was that cloud service POs have been growing steadily during the past five years — not exponentially, not intermittently, but reliably. With some seasonal variation, the number of purchase orders from state and local government for cloud services has risen from about 150 per month in 2012 to nearly 600 in the first months of 2017. Surveys of government officials from the Center for Digital Government lend more evidence that states are moving toward the cloud.

It’s also worth noting that a cooperative cloud purchasing contract set up through National Association of State Procurement Officials ValuePoint has set up an avenue for many cloud vendors to start selling to state governments in particular. The cloud contract, which includes IaaS, PaaS and SaaS, has some names on this list like SHI and Carahsoft, as well as other big names familiar in government like Deloitte, Cisco and Esri.