How SAP NS2 aims to drive the cloud conversation and its business with it
JEDI was not a debacle, says SAP NS2 CEO Mark Testoni, because “what it did is create a momentum for each of the military departments to start moving their capabilities to the cloud.” Courtesy of SAP NS2
By
Ross Wilkers
SAP's NS2 subsidiary is a lot like other government technology companies in that they both work with and compete against the commercial cloud infrastructure providers, so here is now the software giant's subsidiary is figuring it out.
Cloud computing and enabling the applications and services wrapped around those infrastructure environments is the core of what SAP National Security Services does for its government customers.
Which means that in speaking with Mark Testoni, SAP NS2’s CEO and the head of its cloud business, I had to ask what they make of the direction the Defense Department and intelligence community are going down with their multiple-provider approach.
Testoni restated some of what he told us before on the done-and-buried JEDI contract. Even if JEDI as we knew it died, Testoni warns not to see that procurement as a complete debacle.
“It actually was a success because what it did is create a momentum for each of the military departments to start moving their capabilities to the cloud,” Testoni told me.
For both of their migrations, the DOD and IC are contracting directly with the commercial cloud infrastructure providers to move data and other assets into those environments. Little detail if any has been given on what role systems integrators would play in that shift.
SAP is the Germany-headquartered enterprise software conglomerate with about $32 billion in annual revenue. The NS2 shop is an independently-run U.S. subsidiary with its own board of directors and staffers that are cleared U.S. citizens, a requirement to operate in the national security arena as a foreign-owned company.
NS2 formed in 2012 when SAP Government Support and Services and its Sybase federal unit were combined in a realignment.
In speaking with executives at other integrators, they tell us that their proposition is to bring the type of value-add described at the top of this article: let the providers do their thing and we will layer on top the capabilities that can only be powered by cloud environments.
But for NS2, Testoni said the firm uses the commercially-provided clouds as a “value-added component of delivering a capability to a customer.”
That means NS2 is in the business of providing the platform and business application accessible via a secure cloud environment.
Harish Luthra, president of NS2’s secure cloud business, described cloud as a means to the end outcome. Whether that be agencies getting logistics information out into the field, undertake human capital functions or manage acquisitions.
Working well with others is the key aspect of how NS2 goes about its products and services that are wrapped around the clouds, Luthra said. Amazon, Microsoft and Google are among the cloud providers in NS2’s overall partnership network along with other integrators.
“We are working with SAP and our partners to figure out what product goes on what hyperscaler, and these are discussions we have to have with each of them,” Luthra told me. “Our products go on top of the hyperscale infrastructure-as-a-service, that to us is more of a commodity, but this is the value proposition that the customers are looking for.”
Companies like NS2 are in competition with the hyperscale providers somewhat though.
Testoni said the cloud vendors are working on introducing some of those value-added capabilities themselves including business applications.
Think Microsoft and the Office 365 suite for instance. Amazon and Google are also looking to go further “up the stack” in a similar way as characterized by Testoni.
“It’s interesting to watch some of that, because sometimes we compete with them a little bit on the platform and services end, but we generally figure it out and work together,” Testoni told me.
As for what 2022 looks like for NS2: looking for tuck-in acquisitions are back on its agenda. The business made a pair of them in 2018 focused on data management capabilities and a third in 2016 for a software engineering firm.
So is further growing the network of third-party partners and other adjacent markets that can feed what NS2 does for federal agencies. Luthra cited state-and-local governments, international governments, and industries under the umbrella of critical infrastructure as areas of interest for NS2’s cloud business.
Amid their own cloud shift, Testoni sees other opportunities for intelligence agencies in the realm of technology systems modernization.
“They did a lot of their corporate business systems back in the early-to-mid 1990s,” he said. “I think we can play in some of that.”