The state of Federal IT is untenable...just ask Tony Scott, Federal CIO. Agencies are drowning in the unbelievably high percentage of their budgets that go to just keeping the IT lights on. This category of "operations and maintenance" or "O&M" is projected to be over 77% of the overall Federal IT budget. In seven major Federal Agencies, this O&M number is over 90% of their respective IT budgets. In many instances, these applications are aging, high risk, riddled with security vulnerabilities, and don't adequately support the Agency's missions. How can Agencies deliver better IT solutions for their missions, when they can barely afford their legacy solutions?
FY2016 Federal Information Technology Budget
We need to first ask the question ... why do the legacy systems cost so much? The answer lies in the many layers of technology that are historically required to deliver a single application. Whether your software is proprietary or open source, there are hidden costs in the never ending patching, interfacing, maintaining of environments, etc. that drive O&M costs through the roof.
In Federal, embracing "cloud" has been generally synonymous with Infrastructure as a Service (IaaS) initiatives. These initiatives simply move expensive-to-maintain legacy applications to cloud hosting facilities like Amazon. Even if you re-built your application using open source technologies, you are still going to pay people to maintain most of the layers, just like with the legacy applications.
In many instances, these IaaS initiatives are not saving big money ... so now what? The real cost savings comes from re-platforming these legacy applications ... meaning re-doing these applications in Platform as a Service (PaaS) environments in the cloud. What does this mean?
When you move a legacy application to IaaS (e.g. Amazon), you are simply moving your old application to a new hosting environment. You still have all of the O&M costs shown in the visual above. When you re-platform, or re-do, your application into a PaaS environment (e.g. Salesforce), the stack of technologies shown above are no longer something that you maintain. Your very transparent licensing of technology gives you a predictable, all-in cost of running this application. No sneaky patch projects, costly upgrades, or broken stack integration fixes. The pre-integrated PaaS approach is the cost effective, modern architecture that saves the big money.
The table below outlines the savings experiences of organizations that completed both IaaS and PaaS initiatives. Clearly, re-platforming legacy applications into PaaS has proven to be the big money saver.