GENERAL DYNAMICS SELECTED AS CLOUD SERVICES BROKER FOR TEXAS

Airielle Mitchell, MBA.amitchell42@pvamu.edu

Airielle MitchellMISY 5103: Management Information Systems

Course Section: Z01

04/23/15Spring 2015

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GENERAL DYNAMICS SELECTED AS CLOUD SERVICES BROKER FOR TEXAS

Airielle Mitchell, MBA.amitchell42@pvamu.edu

ABSTRACT

General Dynamics is a market leader in business aviationthat utilizes cloud technologies as another means to sell highquality products and services. With cloud computing becomingpopular in all aspects of business, information is becomingunmanageable and needs to be sustained. This case deals with theevolution of cloud computing and the importance for GeneralDynamics to transition from cloud service provider to thenational cloud broker. As a cloud broker, General Dynamics isfacing issues such as guaranteed privacy for users of their cloudservices as well as personalization of the products and servicesGeneral Dynamics offers. As a business solution, General DynamicsIT will outsource to Gravitant, a company that specializes in theservices and infrastructure needed to be a successful cloudbroker. Because of the success of utilizing Gravitant, startingin 2014, General Dynamics is being requested for new projects,increasing its client base.

KEYWORDS: General Dynamics IT, Defense, technology

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GENERAL DYNAMICS SELECTED AS CLOUD SERVICES BROKER FOR TEXAS

INTRODUCTION

Industry Background

The aerospace and defense industry is composed of four types

of businesses that sell products for government or business use.

The four businesses are Aerospace, Combat Systems, Marine

Systems, and Information Systems and Technology. Aerospace

businesses, such as Lockheed Martin and Boeing, sell aircraft

parts at market prices. Combat Systems businesses, including

Raytheon and Bae, offer competitive priced weapons and adequate

amour with training that target military sectors and businesses.

Marine Systems, such as ThyssenKrupp, sell non-nuclear submarines

and naval vessels (General Dynamics).

Information Systems and Technology offer great expertise and

knowledge in the services they render such as IT enterprise

solutions, managing large scale, mission-critical IT programs.

They may also provide mission support (General Dynamics).

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Competitors of General Dynamics Information Technology

include the Boeing Company, Lockheed Martin Corporation, and

Textron Inc. Total sales in aerospace and defense recently has

reached $ 286.9 billion (according to the Yahoo! Finance). In

2015, Aerospace accounted for 22.58% of industry sales. The

current defense spending amounts to about 4% of Gross Domestic

Product.

In the meantime, the non-government and government sector

began changing. With more and more e-commerce becoming common,

cloud computing became more popular in order to keep up with the

demands for storage increased. Cloud computing is a great

cluster of computers to serve as the main host to run

applications, requiring high-level computing (Parallel Computing,

2011).

By 2014, 87 percent of organizations were using public cloud

(2014 State of the Cloud Survey). To help maintain the large

growth of cloud computing Cloud Brokers, companies that monitor

and manage the cloud, are in demand to lower the potential chaos

of the cloud, including security, purchase, and personalization

issues.

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In addition, General Dynamics employs a nationwide workforce

that’s available immediately to help agencies from all states,

counties and municipalities to leverage the Texas contract to

rapidly provision and manage their own cloud services. The cloud

deployment challenge involves dealing with different billing

relationships, consolidating demand across various pockets of an

organization and optimizing license management.

Description of the Company’s Business: General Dynamics

Founded in 1899 and headquartered in Falls Church, Virginia,

General Dynamics leads the market in business aviation. It

specializes in combat vehicles, weapons systems and munitions,

shipbuilding, communication and information technology systems

and solutions. The company grew through acquisitions until early

1990s, selling nearly all divisions except Electric and Land

Systems. In the mid-1990s, General Dynamics expanded by

acquiring combat vehicle businesses, additional shipyards,

information technology product and service companies and

Gulfstream Aerospace Corporation.

General Dynamics has acquired and integrated more than 65

businesses to positively add to its portfolio.

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With about 93,000 employees, General Dynamics is split into

four main markets: Aerospace, Combat Systems, Marine Systems, and

Information Systems and Technology (General Dynamics).

Aerospace group creates and manufactures aircrafts and

provides aircraft services. The company’s Combat Systems group

does system engineering, designing, development, and support in

tracked and wheeled military vehicles and weapons systems.

The Marine Systems group designs, builds, and supports their

own submarines and surface ships. It offers nuclear-powered

submarines, surface combatants and other combat-logistics ships,

as well as commercial ships. Marine Systems offers design and

engineering support services, overhaul, repair and lifecycle

support (General Dynamics).

Last but not least, the Information Systems and Technology

group delivers great technologies, products and services that

support many military, federal and civilian, and commercial

needs. This group offers secure mobile communication systems and

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IT solutions (cloud computing included) and mission support

services. IS and T includes intelligence and surveillance, naval

control systems, and cyber security solutions.

Motivating Factors

Charlie Plummer said it best. Texas is making a way for

state agencies to ‘benefit from the flexibility and cost savings

of cloud computing.’ (General Dynamics Selected as Cloud Services

Broker for Texas, 2014). Charlie Plummer is General Dynamics

Information Technology’s vice president and general manager for

the IT solutions segment. It is now well known and accepted that

information technology is a critical driver of business results

with digital strategies including websites, online ads, and

social, mobile applications, and other devices. Even

organizations in traditional industries are learning how to gain,

grow, and retain customers through software applications- online

banking, e-commerce, and online insurance exchanges. The ability

to accelerate application delivery can cause organizational

growth and profitability. In order to meet business needs and

delivering applications more quickly, new development practices,

such as agile development, continuous integration, and continuous

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delivery, have evolved to reduce cycle times and increase

quality. However, the ability to make infrastructure and

platform services has faded. Wait times for resources have

extended to weeks or even months in many enterprises, creating a

divide between the goals of developers and central IT.

For this reason, developers switched to public cloud

services providing mostly instant access to infrastructure and

platform services, leaving the technology partners at a difficult

task of trying to control this “shadow IT” (IT as a Cloud

Broker). IT leaders are positioning themselves to link the

IT/developer divide as well as support the business need for

agility by brokering cloud services for the enterprise. By

becoming a cloud services broker, General Dynamics Information

Technology can add a critical layer of visibility and governance

to cloud usage while delivering agility across cloud services.

In recent years, General Dynamics IT was facing and continues to

face intense competition from companies such as Lockheed Martin,

Dell Cloud for U.S. Government, and Google, in private, public,

and hybrid cloud computing sectors. General Dynamics IT has to

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find a way to combat these threats by taking advantage of being

selected in January of 2014 as a cloud services broker by the

state of Texas Department of Information Resources. Cloud

computing is as an important and growing network medium. In

particular, Cloud broking facilitates convenience, variety of

services, price savings, wireless storage as well as time

savings, privacy, and immediate access from any location in the

country. This generates a great opportunity for General Dynamics

IT. Cloud broking with the state of Texas and other states will

place General Dynamics IT better in product and service offerings

from its competitors. In the process, it would require additional

technology infrastructure for its products and services.

In facing challenges from competitors and the business

environment and in capitalizing on the opportunity of cloud

broking, General Dynamics IT is facing questionable issues. This

case should try to address the following questions regarding

General Dynamics IT:

What are General Dynamics cloud services and how can they

use these technologies to benefit the end-users (aka

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consumers)? How can General Dynamics IT better understand

the target market?

How can General Dynamics IT meet technology infrastructure

demands?

DESCRIPTION OF THE STUDY

When clients use traditional desktop software individually

and in their companies, they can go through each database and

file thoroughly. This storage and cost efficiency is enhanced

through adding memory, buying other desktops and database systems

with a personal or company budget that may not be able to

accommodate the company’s needs. However, cloud computing has

fixed these problems, providing unlimited storage space and

decreasing the costs by eliminating the need for storage and

Traditional desktop software. However, with cloud computing

becoming more established and used nationally, cloud brokers are

very much needed to regulate cloud laws, contracts and services.

Although initially a good idea, cloud broking is a fairly new

platform and requires guidelines in order to be successful and in

order to be able to fulfill the needs of consumers. In order to

create such services, General Dynamics IT needs to research what

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services to offer and pay attention to the market and focus on

security.

SOLUTION

Strategy for Change

The business strategy and solution for General Dynamics IT

is to create and continue to use innovative and interactive

features to its cloud services, to understand and meet the needs

of its target market, and to utilize technology infrastructures.

Relevant Cloud Services

A company's cloud products and services play an important

role in furthering the cloud servicing success. A successful

product or service is a great indication of a successful

transition in this department. The types of services the company

provides are Cloud Infrastructure as a Service (IaaS), Cloud

Platform as a Service (PaaS), Cloud Software as a Service (SaaS),

and Cloud Assessment as well as among other services. General

Dynamics was also selected to deliver cloud computing services

via IaaS and email-as-a-service blanket purchase agreements by

GSA. To set General Dynamics IT apart from other competitors, it

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should offer Cloud Assessments to consumers before any other

service is rendered. This better determines the needs of the

consumer directly without using an unnecessary solution to the

cloud service. Consumers will respect the care and effort that

was put into the cloud brokerage service.

Table 1. Types of Cloud Services General Dynamics IT provides

CloudServices

Description

Infrastructure as a Service (IaaS)

-a form of cloud computing that provides virtualized computing resources over the Internet

Platform as a Service (PaaS)

-cloud computing model that delivers applications over the Internet. In a PaaS model, a cloudprovider delivers hardware and software tools -- usually those needed for application development-- to its users as a service

Software as a Service (SaaS)

-software delivery method that provides access to software and its functions remotely as a Web-based service

Cloud Assessment

-helps the partner and the customer have a structured conversation to build a comprehensive cloud strategy

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Target Consumer Profile

The cloud portal is now available to state and local

agencies and public education institutions, and U.S. Department

of Defense – in Texas and other states – that are seeking a

single point of contact to procure, manage and integrate public,

private and hybrid cloud services and resources. General Dynamics

IT target consumer is government. This type of consumer is

quality seeking and favors security services. The cloud service

consumers value privacy and unlimited storage space of data and

information. Since government consumers are not fond of breaches

of security, and are not more likely to use Cloud computing

services to ensure the reliable storage of highly encrypted data

and information, cloud broking is an excellent means of

controlling the exposure of sensitive information (Assessing

Innovations in Cloud Security, 2014). With General Dynamics being

new to the cloud brokerage business, it is too early to tell the

direct demographics of GDIT’s consumer.

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Technology and Infrastructures

Creating comprehensive features to its cloud services and

technology infrastructure needs require extensive expertise. As

a solution, General Dynamics IT outsources to Gravitant.

Gravitant is General Dynamics’ secret weapon. It provides

General Dynamics with a CloudBroker online portal for a cloud

brokerage and management platform (General Dynamics). Gravitant,

Inc. has an industry-leading platform called cloudMatrix.

Gravitant runs a cloud brokerage software which is delivered in a

SaaS model. Gravitant’s cloudMatrix makes it. This is

advantageous as it enables General Dynamics IT easily to plan,

buy, manage and broker cloud services and enables users to move

from a slow service-ticket model to an agile design-to-order

model. Gravitant’s security approach is holistic. Gravitant uses

access security such as IP addresses and firewalls associated

with cloud-based infrastructure deployment. Cloudmatrix also

manages authentication by utilizing centralized keys, SSH and

public keys. This marriage between General Dynamics and

Gravitant, Inc. integrates the expertise and resources of an

established industry with an innovative cloud servicing platform.

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Role of Technology

Gartner’s estimates say that roughly $100 billion would be

consumed yearly and universally, on combined Cloud Services

Brokerage (CSB) roles by 2014. In cloud computing, the need for

intermediaries to aggregate the services and graft them into

company infrastructure or customize cloud services grows as the

number of cloud services and the rate of consumer implementation

grows. Without someone acting as the middle man, cloud service

consumers are forced to manage all of the transactions (e.g.,

payments, governance, data movement, customization and

enrichment) between the providers and their services. This can be

a very difficult task, especially when they are using more than

three cloud services from each independent provider. The Cloud

is now being adopted by business and information technology users

as a way to push their organizations more effective and save

costs. Along with this opportunity comes a new set of pain points

and significant risks to enterprises that must be addressed.

With General Dynamics having to design, service, and manage

users of their cloud computing products, GDIT chose Gravitant

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cloudMatrix (General Dynamics Information Technology Taps

Gravitant's CloudMatrix Platform 2013).

Dramatically shorten the time and effort needed to respond to Cloud RFPs

With quite a few companies converting to cloud computing, a

large number of cloud service providers are under enormous

pressure to provide a broad range of services. To minimize time

consumption of knowing which cloud services are needed for each

company from scratch, Gravitant came up with an excellent

approach. Gravitant’s cloudMatrix broker and management software

allows IT to manage across the complete cloud lifecycle and,

through their Plan-Buy-Manage approach; users can begin in

the area that matters most to them (General Dynamics Information

Technology Taps Gravitant's CloudMatrix Platform). Plan: Users

must prepare to move to cloud by using an Intelligent Decision

Framework to decide which app for what cloud. People can easily

design complete cloud solutions. Buy: General Dynamics IT can

give their users a faster and complete buying experience with an

IT Approved Marketplace based on the concept of the service

store, which provides the user experience of an app store but

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also includes managed services and is powered by a dynamic

service catalog. Manage: GDIT can maintain cost visibility and

budget tracking through living order management and dashboards.

Gravitant provides vivid and precise graphs and charts to allow

users opportunity for better deals on cloud service provider

visibility. The market potential for such services is growing.

Make consumption of users own value-added services easier

All sectors of government can now use the General Dynamics’

Email-as-a-Service (EaaS) blanket purchase agreement service to

acquire cloud-based email, office automation, electronic records

management, and migration and integration services (General

Dynamics IT). Since 2012 when this article came out, more

companies have been requiring services from cloud service

providers. Other services were needed to continue effectively

servicing the networked businesses.

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Through the Gravitant feature, made-to-order services on

www.gdit.com/cloudbroker started January 2014 with the

introduction of email services for the DoD; to date, other

services were being offered.

This feature is especially important since more companies

are opting to use the cloud. Growing cloud trends for the public

and private sector are increasing approximately 10% each year.

General Dynamics IT is estimated to serve 45 million users by

2016. (Information systems and Technology) The Operating margin

is increasing each year. Now at 8% percent and increasing,

General Dynamics IT should consider honing and popularizing the

existing cloud products and services they already have instead of

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the expanding because of the lowering of their IT revenue (Profit

from the Cloud by Shortening Your Time To Revenue).

Improve your customers’ experience by delivering Just-in-Time IT

Just-in-Time is described as a production strategy that seeks

to improve a business' ROI by reducing inventory during the

process and the cost it takes to carry the product. A prime

example of a just-in-time strategy was Japan in the 50s (Profit

from the Cloud by Shortening Your Time To Revenue). As Japan

adopted it for its car company, Toyota, just-in-time strategy

began raising productivity (through the elimination of waste)

significantly by using signals which tell production when to make

the next part. By collecting customer information, the cloud is

enabling clients to not have to take time out to customize their

own products and services in order to meet their needs. They can

instead focus on the tasks they are using the cloud for. General

Dynamics will have Gravitant to retrieve necessary information to

make decisions on cloud services needed for the clients.

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Converting Traditional Desktops to the Cloud

Being in a cloud environment limits the sense of security of

a physical desktop since users are not physically using a desktop

to store and manage data for use of the company. As cloud

computing gains popularity with enterprises of corporations,

governments and end users, many orthodox applications that were

used for years are moving to the cloud. Three reasons are that

cloud applications are often less expensive, simple to manage,

and easy to update and use. Since a browser is the most often-

used tool for end users, many find it convenient to work with

cloud-based applications that are delivered through a browser.

Implementation

In order to create an interactive experiential web site and

cater better to its target market segment, General Dynamics IT

utilizes Gravitant technology with an easy to comprehend

interface, such as the Cloudmatrix:

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During the implementation process is GDIT was introducing

cloud service brokerage offerings optimized for government

entities for affordable and manageable hybrid cloud computing

solutions. Gravitant cloudMatrix reorganizes the assessment,

serving as both a corporate and IT administration center for

Just-in-Time IT.

For IaaS, GDIT will manage the set infrastructure while the

client has control over OS, storage, deployed applications and

select networking workings (hosting firewalls). PaaS deploys

client-involved applications onto the cloud infrastructure with

the use of programming languages and tools supported by the

provider (General Dynamics Information Technology Taps

Gravitant's CloudMatrix Platform). During SaaS, the customer

does not manage or control the underlying cloud infrastructure

(network, os, servers, etc.). The provider will run this service

in the cloud.

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OUTCOMES

By providing specific features and understanding the target

consumer base, as well as being the first company chosen for the

brokerage of Texas and other states, General Dynamics IT is still

in the process of becoming successful in transitioning its

clients into the cloud through building a brokerage site that

provides high quality assessments. Between a two-year period

from 2012 to 2014, General Dynamics IT revenue sales decreased

from $4.7 billion to $4.5 billion (Information systems and

Technology). Cloud sales, represented as IT solutions, have

decreased. The amount of the IT solutions to the total amount of

revenue however is 49.67% from 46.10% of total revenue. See Table

for details on General Dynamics IT's revenue, including Cloud

(IT solutions) sales (Information systems and Technology). In

addition, General Dynamics IT acknowledged the cloud for its

implementation of innovation and technology in its 10-k.

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Table 2. General Dynamics IT Sales ($Millions) (www.sec.gov)

Sales Revenue 2014 2013 2012Mobile communication systems

$2771 3657 3425

IT solutions and mission support services

$4549 4734 4545

ISR solutions $1839 1877 2047Total Information Systems and Technology

$9159 10268 10017

Although there is a slight decline in the sales revenue,

there is a general rule of thumb that it takes time to

successfully transition into another methodology in technology.

For example, General Dynamics IT successfully implemented the DEE

program, the largest enterprise-wide e-mail infrastructure in the

DOD. The system, which joins e-mail infrastructure, centralizes

e-mail management and reduces technical and functional costs,

supports e-mail for 4.5 million users worldwide General Dynamics

IT. Today, there are over 1 million users who have migrated with

more than $75 million in savings. This makes DoD Enterprise

Email one of the largest independent email systems in the world

(General Dynamics IT). As an enterprise-wide service, DEE

continues to reduce cost of operations and maintenance by merging

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hardware into Defense Information Systems Agency’s Defense

Enterprise Computing Centers.

LESSONS LEARNED

Lessons can be learned from General Dynamics IT. Cloud

computing is replacing traditional desktops. Understand and meet

the needs of the target market. Increase competitive advantage

by providing effective products and services.

In 2012, research firm Gartner believed the personal cloud

would replace the PC. That very same year, Google planned

a cloud-centered future with Google Play and its market-leading

Android mobile OS. The following year, personal computers,

Microsoft and Apple also explored the cloud into the next

generation of their desktop operating systems, Windows 8, and OS

X Mountain Lion (About the Cloud 2011). Cloud service brokers

are in high demand for the simplifying of the cloud selection for

public and private sectors.

With the target market being mainly government agencies and

companies, privacy has become the hot button issue for General

Dynamics. To sustain privacy, holistic approaches such as access

and authentication are to be applied and maintained by the

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companies and the cloud broker providing service. Once word gets

out that General Dynamics has an excellent track record of cloud

sustainability and success in implementation, more business

ventures will start to occur. For example, Sandia National

Laboratories is requesting that GDIT provide strategic support

for the design and development of a cloud infrastructure for

research and development.

Lastly, to get the full benefit of the cloud, IT

organizations need to make a broader transition to an IT-as-a-

Service delivery model. Many companies take the initial step by

using IaaS in support of existing Java or .Net applications.

They also are using PaaS tools for new applications. These tools

streamline the interface between app dev and IT ops teams to

shorten the time for developing and deploying applications.

CONCLUSION

General Dynamics is a market leader in business aviation

that utilizes cloud technologies as another means to sell high

quality products and services. Through Gravitant cloudmatrix, it

continues to provide innovative features that replaces physical

desktop with the cloud. General Dynamics IT assess and customize

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their customers’ cloud services needed for their companies using

plan, buy and manage. General Dynamics IT implements extensive

security measures such as access and authentication to better

appeal to its main clients’ need for security and privacy. By

outsourcing its technology needs to Gravitant cloudmatrix,

Dynamics IT focuses on its core business and opened doors for

more personalized-oriented products and services for the

companies they are contracted to. Other companies should take a

lesson from General Dynamics as an innovative leader in cloud

brokerage.

REFERENCES

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Yang, Kong. April 30,2014. Gravitant cloudMatrix: Security for Multi-cloud. http://blog.gravitant.com/2014/04/30/gravitant-cloudmatrix-security-for-multi-cloud/

Gravitant, "Profit from the Cloud by Shortening Your Time To Revenue," Gravitant Inc., http://www.gravitant.com/roles/cloud-brokerage-for-solution-providers/

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Seeds, Catherine, Caitlin New. March 26, 2013. News Bank. Gravitant Supports General Dynamics Information Technology in Offering New Cloud Brokerage Services to Government Entities.

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Mehrotra, Rajat, Srivastava, Srichti, Banicescu, Ioana, Abdelwahed, Sherif. March 26, 2015. Future Generation Computer Systems. Towards an autonomic performance management approach for a cloud broker environment using a decomposition-coordination based methodology. P 1-10.

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