Washington State

Cloud Readiness
Report
Office of the Chief Information Officer
January 4, 2021
Table of Contents
Executive Summary.........................................................................................................................................4
Key Findings ............................................................................................................................................4
Potential Challenges ...............................................................................................................................4
Recommended Projects and Implementation Models ...........................................................................5
State Cloud Migration Plan .....................................................................................................................5
Background .....................................................................................................................................................6
ESHB 1109 ...................................................................................................................................................6
Statewide Cloud Readiness Assessment Project ............................................................................................7
Project Scope and Objectives......................................................................................................................7
Data Collection and Analysis .......................................................................................................................8
IT Asset Inventory and Analysis ..............................................................................................................8
IT Contracts Analysis ...............................................................................................................................9
IT Staff Impacts Analysis .......................................................................................................................11
WaTech Support for Agency Migrations ...................................................................................................13
Cost/Benefit Analysis ................................................................................................................................14
IT Assets ................................................................................................................................................15
IT Staffing ..............................................................................................................................................16
IT Maintenance Contracts .....................................................................................................................17
WaTech Private Cloud Service ..............................................................................................................17
Recommended projects ............................................................................................................................17
State Cloud Migration Plan ...........................................................................................................................21
Overview .......................................................................................................................................................21
Strategic Goals ..........................................................................................................................................21
State IT Strategy and Policy Changes ........................................................................................................22
Update Cloud Strategy ..........................................................................................................................22
Update State Data Center (SDC) Strategy .............................................................................................22
Update State IT Policies ........................................................................................................................22
State IT Workforce Strategy ......................................................................................................................23
Preparing for Migration ............................................................................................................................23
Asset and Application Migration...............................................................................................................24
WaTech Agency Support Strategy ............................................................................................................26
Next Steps: Establish Cloud Services Broker Program at WaTech ............................................................27

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 To obtain this publication in alternative format, please contact the Washington Technology
Solutions (WaTech) ADA coordinator, Chris Britton, at 360.407.8437 or via email at
[email protected].

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Executive Summary
The Office of the Chief Information Officer
(OCIO) was tasked by the Legislature, in Key Findings
Engrossed Substitute House Bill 1109, to
conduct a statewide cloud readiness • Estimates are based on migrating 9,000
assessment and produce a report on the servers and 3,300 applications to cloud
results. Over a nine-month period, and with services.
the industry expertise of Unisys, the OCIO • The recommended 5 year plan achieves
an overall 47% return on investment (ROI)
managed the effort to document the state’s
– about $60 million net benefit, on a $127
existing information technology (IT) assets, million investment.
determine agencies’ readiness to move • ROI is based on an enterprise migration.
assets to the cloud and calculate the costs A decentralized approach could add 30%
and benefits of doing so. Using to time and cost.
recommendations from this assessment and • Many agencies and staff are unprepared
other expert resources, the OCIO developed for cloud migration. The recommended
plan addresses these needs.
a plan to leverage the cloud for optimal
financial benefit and provide a strategic • The state will adopt a “Cloud-only”
strategy, i.e. agencies shall adopt cloud
platform for innovation and the digital solutions for all new IT systems and move
transformation of state government services. all existing assets that are compatible.

Key Findings
• Most agency applications appear to be good candidates for migration to cloud services.
• The recommended five-year plan results in an estimated return on investment (ROI) of
47% – about $60 million net benefit. This is based on migrating 9,000 servers and 3,300
applications, about 80% of in-scope IT assets.
• A five-year investment of up to $127 million is required to achieve the estimated ROI and
deliver the best strategic value to the state. The five-year plan assumes two years to
execute planning and preparatory projects and three years for major migration projects.
• Current (FY20) hardware related costs total about $78 million annually. ROI calculations
assume 80%, or about $62 million, can be shifted to offset cloud migration investments
instead of maintaining or replacing end-of-life servers.
• IT staff must be trained to fill skilled cloud positions, but fewer positions are likely needed
in the long term. The state’s normal annual attrition could work to align the IT workforce
with reduced staffing needs and achieve additional savings.

Potential Challenges
• Total investment needed for Fiscal Year 2022 (FY22) is $22.5 million to execute all
planning and preparatory projects. This includes required initiatives such as workforce
training, cybersecurity and network enhancements, and identity management services.
• A central Cloud Services Broker program provides the foundation for cloud migrations
and should be established as soon as possible. WaTech could leverage $1.37 million

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 from its existing fund balance to jumpstart the program, but an additional $7.4 million is
needed in FY22 for a statewide configuration management database and other tools to
discover, analyze and optimize enterprise cloud migrations. These costs are included in
the $22.5 million total estimate for FY22. An additional $5.6 million is needed annually to
cover the Cloud Services Broker program’s ongoing operational costs.
• The decentralized nature of IT operations across state agencies could increase migration
time and costs by 30% or more if a coordinated, enterprise approach is not used.
• Many agencies are unprepared for cloud migration and need time and funding to train
staff and manage organizational change. This is part of the two-year planning and
preparation time needed before large-scale cloud migrations can occur.
• Applications that are not cloud ready will require remediation, or they will remain on-
premises until replaced. Remediation costs are unknown and not included in ROI
calculations but are identified as an optional project at an assumed cost of $15.3 million.
• Migrations could extend beyond FY27 because of budget cycles, complexity of migration,
impacts to business and staff resources, and potential for application remediation.

Recommended Projects and Implementation Models

Multiple implementation models were analyzed with net
benefits ranging from $0 to $97 million over five years.
State Cloud Migration Plan
The models with the highest ROI posed the greatest
Strategic Goals
operational risk and offered the least strategic value.
The recommended model achieves 47% ROI for a net
• After June 30, 2022, all budget
benefit of $60 million over five years on a $127 million requests for new IT systems
investment. The model assumes 9,000 servers and target cloud solutions.
3,300 applications are migrated to the cloud over a • Average of 20% (about 650) of
five-year period, including two years to plan and eligible applications are migrated
prepare through a set of recommended projects. from existing on-premises servers
to cloud solutions each year from
These recommended projects are summarized in the FY23 through FY27.
following pages and are thoroughly documented in the
• 80% of individual cloud migration
accompanying report titled, “Unisys Deliverable 3: projects achieve positive ROI
Statewide Cloud Computing Readiness Assessment”, within three years following
hereafter called the Unisys report. The report is a 377- project close.
page detailed account of the data, analysis and • 20% of staff positions identified
recommendations resulting from the OCIO’s statewide for cloud support roles achieve
cloud readiness assessment project. necessary certifications each year
beginning in FY22.
State Cloud Migration Plan • 10% reduction in SDC annual
operations costs by FY27.
The final chapter of this document outlines the steps
recommended by the OCIO to achieve the desired
ROI, and to set the state on the path to a sustainable and strategic cloud environment. The
OCIO recommends that a formal “cloud-only” strategy be adopted with supporting policies and
standards. Goals are established with targets for migration and savings as well as workforce
development and a plan to implement the recommended preparatory and enabling projects is
presented.

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Background
Since 2013, the Washington State Chief Information Officer’s recommended direction has been
to “think Cloud-First (1).” Agencies were encouraged to consider public, private and hybrid cloud
solutions before investing in traditional server-based technology.
In recent years, agencies have
increasingly invested in cloud ESHB 1109 Requirements include:
solutions. Several agencies,
including the state Health Care • Creating an inventory of state agency assets (i.e.
Authority (HCA) and the Department applications and servers), associated service
contracts and other relevant information.
of Health (DOH), have gone all-in on
• Identifying impacts to state agency staffing resulting
cloud technology and the One
from the migration to cloud computing including:
Washington program is working to o Skill gaps between current on-premises
replace our statewide labyrinth of computing practices and how cloud services
administrative and financial systems are procured, secured, administered,
with a modern cloud-based maintained, and developed.
Enterprise Resource Planning (ERP) o Necessary retraining and ongoing training and
system. More than 55,000 executive development to ensure state agency staff
branch employees are in the process maintain the skills necessary to effectively
of moving to cloud-hosted email and maintain information security and understand
changes to enterprise architectures.
office productivity services and 60%
• Identifying additional resources needed (by WaTech)
of 2021-23 IT budget requests target
to enable sufficient cloud migration support to state
cloud solutions.
agencies.
Although considerable progress has • Submitting a report by June 30, 2020* to the governor
been made, approximately 90% of and the appropriate committees of the Legislature
the state’s major business that summarizes statewide cloud migration readiness
applications remain locked away in and makes recommendations for migration goals.
aging on-premises servers, hindering
* State and vendor resources were severaly impacted during the early
the state’s progress towards IT months of the COVID crisis causing the project to be paused for
modernization and digital several months. When the project resumed the report due date was
transformation. The state needs a reset to December 31, 2020
comprehensive cloud strategy and
migration plan to take advantage of
strategic and fiscal opportunities and maximize IT investments.

ESHB 1109
Recognizing this issue, the state Legislature in 2019 appropriated funds in the state operating
budget, Engrossed Substitute House Bill 1109, section 152(9). The bill directed the OCIO to
conduct a statewide cloud computing readiness assessment to prepare for the migration of core
services, including ways the state can leverage cloud computing to reduce costs.
The OCIO, part of Washington Technology Solutions, is responsible for preparing and leading
the implementation of a strategic direction and enterprise architecture for information technology
throughout state government.
(1) FY14-FY17 IT Biennial Report, pg. 31

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The OCIO participated in early discussions with legislators during the development of ESHB-
1109 to better understand the intent and expectations of the cloud readiness assessment.
Cost savings was the primary driver of the bill, along with an overall perception that Washington
state government should make better use of cloud technologies to reduce operating overhead.
Legislators also wanted to understand the potential impacts to the state’s IT workforce as
systems are moved from local data centers to cloud solutions.

Statewide Cloud Readiness Assessment Project

To fulfill the provisions of ESHB-1109, the OCIO established the Statewide Cloud Readiness
Assessment project with Jim Weaver, State Chief Information Officer, as the executive sponsor.
A multi-agency panel selected Unisys to conduct the assessment, noting the Unisys “Cloud
Forte” methodology was well-aligned to the requirements set forth in ESHB-1109. The joint
OCIO/Unisys project team began work in July 2019.

Project Scope and Objectives

The assessment scope was limited to executive branch agencies within the purview of the OCIO,
excluding higher education. The OCIO also excluded agencies without significant IT systems
because they were unlikely to have hardware or software assets that would result in measurable
savings from cloud migration. Seventy-nine agencies reported having IT systems supporting their
daily operations, although not all of them participated in every phase of the assessment.
Based on the requirements of ESHB-1109, the objectives of the assessment project were
organized into the following work streams:
IT Asset Inventory and Analysis: The asset inventory created a physical count of IT hardware
and business applications used by in-scope agencies. Assets were defined as commercial and
custom-developed software applications, databases used by the applications, servers that
housed the applications, and any other hardware that supports or enables agency use of the
applications. Agencies self-reported their asset inventories because no centralized IT
configuration management database exists. The assessment analyzed the assets and reported
on the feasibility of migrating them to cloud solutions.
IT Contracts Analysis: This analysis reviewed agency IT contracts to determine if cost-savings
opportunities exist in utilizing cloud solutions. The assessment evaluated existing spend patterns
using data collected and reported by the Department of Enterprise Services. The analysis also
determined where cost savings or cost shifting may occur as agencies migrate to cloud solutions.
Contracts were reviewed to determine if there were any barriers to using cloud services related
to solution requirements or fees.
IT Staff Impact Analysis: The IT staff impact analysis identified current cloud technologies
staffing levels and skillsets across agencies and identified gaps that may hinder the adoption of
cloud solutions. The assessment used available data on state IT staff metrics with assistance
from state Human Resources. Additional supporting information was provided through a survey
of agency chief information officers. State data was compared with industry data from
organizations of similar size to determine where skills gaps exist. The analysis recommended
opportunities for cloud training and certification for IT staff and determines if cloud skills are
adequately represented in agency training budgets.

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WaTech Resources to Support Agency Migrations: WaTech manages core IT services used
by all state agencies and will play an important role as agencies migrate to cloud solutions.
ESHB-1109 required WaTech to determine what additional resources the agency required to
facilitate and support agencies as they migrate to cloud solutions.
Cost/Benefit Analysis: To report on the anticipated financial outcome of migrating to cloud
solutions, the assessment included a cost/benefit analysis of the data collected. Using industry
models and trends, the analysis compared the anticipated costs associated with cloud migration
activities against the potential benefits that may be achieved in a post-migration environment.
The analysis provides the state of Washington with a path to achieve a favorable ROI.

Data Collection and Analysis

IT Asset Inventory and Analysis
All 79 agencies in scope for the cloud readiness assessment were asked to provide the project
team with an inventory of their IT assets using a standardized template. Inventory data was
collected from 63 agencies who reported operating traditional server-based applications.
Agencies without server-based applications and those already fully converted to cloud
technology are not reflected in this report. Mainframe and similar legacy-based applications were
also generally excluded from consideration. These mainframe systems are already on a path for
replacement with new cloud-based applications or are moving to WaTech’s new vendor-hosted
mainframe as a service that employs a cloud-like OpEx rate model.
The data collected was mostly self-reported by agencies. Six agencies were unable to provide
inventories with the level of detail needed so an automated discovery tool was used in those
cases to collect the data.
All inventories were processed through Transition Manager, a third-party application licensed to
Unisys and used for the purpose of analyzing IT assets in preparation for migration to a new
computing environment. Transition Manager analyzed the hardware and software attributes to
develop a series of datasets that would be used for further analysis. The datasets revealed the
apparent age of the hardware, the operating system and database versions, and connectivity
dependencies among systems. The data was recorded in an Excel-based tool that Unisys
developed called a Cloud Readiness Checklist.

The Cloud Readiness Checklist

The Cloud Readiness Checklist is a multi-tab spreadsheet
with formulas that calculate an application’s cloud “fit” score. Good Candidates for
The checklist looks at multiple data elements from the asset Cloud Migration
inventories, including the implementation date, number of
users and underlying technologies. It combines the • Virtualized servers.
• Modern programming
information with the analytical data from Transition
language.
Manager. Those applications that use virtualized operating • Modern security architecture.
systems, modern development languages, relational • Relational database.
database platforms and secure connectivity standards • Low external dependencies.
generally were deemed to be favorable candidates for cloud • Low user counts.
migration. Conversely, systems with a high user count,
outdated or non-standard technologies, or complex

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interdependencies with other systems were deemed to be high risk and unfavorable candidates
for cloud computing.
Results
Initial analysis of the reported inventory data suggested up
to 91% of the assets would be favorable candidates for
Opportunity
cloud migration. This was due primarily to the fact that
nearly all systems use virtualized technologies and modern • 91% of inventoried IT
security architectures that can be replicated with commercial assets are favorable
cloud service environments. candidates for the cloud.
• Servers will be at end of
The analysis validates that agencies are generally
service life in next 2-7
maintaining their IT systems appropriately and keeping up years.
with evolving technology standards. But the analysis also
• Server replacement funds
discovered that 23% of agency hardware (i.e. physical
should be shifted to cloud
servers and storage) are at or near the end of their useful preparation and migration
life. Within seven years, all servers in state inventory will be projects.
due for replacement.
In total, the in-scope agencies spent about $78 million annually on server hardware. This
presents an opportunity for agencies to shift workloads and funding to cloud storage and
compute platforms as servers reach end of life.

Considerations
Analysts had only a limited view of the internal and operational architectures of agency systems
and the majority of agencies did not provide data on the age of server hardware. Therefore,
much of the analysis was based only on assumptions of an application’s performance and
security requirements. While initial analysis suggests that 91% of IT assets are favorable
candidates for cloud migration, the actual percentage could be significantly less.
The “favorable candidate” list should be considered a starting point for additional analysis. Each
application’s architecture and operating characteristics must be thoroughly analyzed along with
data flows and security requirements before making a definitive recommendation of which
applications should be moved to the public cloud and which should remain on-premises or in the
WaTech private cloud until remediated or replaced.

IT Contracts Analysis
The 2019 IT Contracts Report and the 05116 Cloud Solutions master contract information
published by the Department of Enterprise Services (DES) was used to establish a baseline for
the contracts analysis. Unfortunately, the IT Contracts Report included data from only 61 of the
79 in-scope agencies so the data was treated as a large sample rather than a complete data set.
The report organized the data into multiple categories called “towers,” which allowed the project
team to focus on the subset of towers that were most relevant to the assessment. The Data
Center, IT Compute and Storage towers were the most likely to be impacted by cloud migration
as the technologies that would be replaced by cloud services fall within these categories.

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 Tower Included Technologies
Costs associated with the facility that houses agency assets including power,
Data Center
environmental controls, security, racks and cabling.
Purchase, lease, licensing, maintenance, support, and any third-party administration
IT Compute
costs associated with physical and virtual servers.
Purchase, lease, licensing, maintenance, support, and any third-party administration
Storage
costs associated with centralized storage (SAN, NAS).
Exhibit 1: IT Towers for Contracts Analysis

Results
The IT Contracts Report showed the following tower costs for in-scope agency contracts:
Tower 2019 2020 2021 2022
Data Center $43,627,168 $43,420,698 $35,945,466 $31,723,674
IT Compute $35,453,192 $24,247,290 $15,247,954 $11,587,436
Storage $26,476,293 $23,157,679 $15,543,109 $11,901,805
TOTAL $105,556,653 $90,825,667 $66,736,529 $55,212,915

Exhibit 2: IT Tower Costs, 2019-22

While the tower costs shown do not include every agency in scope for the assessment, the
report provides a good baseline for further analysis related to cost savings. The data indicates
many of these contracts will expire during the next two years. This presents a good opportunity
to evaluate cloud service options rather than renewing or replacing these contracts for additional
on-premises hardware.
The 05116 Cloud Solutions master contract provided detailed information for each vendor
agreement covered under the contract. The terms and conditions were reviewed for each
agreement to determine if anything would prevent agencies from migrating to cloud services
while under contract. Analysis confirmed that nearly all contracts covered by the Cloud Solutions
master contract would not be affected by increased use of cloud services.
It is worth noting that many agencies reported contracting individually for cloud services outside
of those covered by the Cloud Solutions master contract. This is an indication that agencies may
not be getting the best pricing from commercial cloud vendors and a more aggregated approach
could yield additional savings.

Considerations
With the limited data available it was not possible to map a direct relationship between each IT
asset and its supporting maintenance contracts. The 2019 IT Contracts Report does not include
the detail that identifies the costs of individual assets that were purchased or maintained within
each contract. Early discussions with agencies indicated it would be a significant effort for them
to provide this level of detail within the timeline and resources available to the cloud assessment
project. Therefore, summarized data within each IT tower was used to perform the contracts and
cost/benefit analysis.

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IT Staff Impacts Analysis
Method
Baseline data was gathered about current IT
CIO Survey Results: Staffing
staffing, training, and resource allocations for in-
scope agencies. This data included information Required to Support Cloud
from the 2019 IT Professional Structure (ITPS) job Migration
classification study, published State Human 87% Agencies have developed a
Resources data and an agency survey conducted plan for IT skills modernization
during the assessment. Cloud support and to support cloud technologies.
staffing models from Gartner and other industry
sources were used to establish a benchmark for 40% Agencies have not evaluated
IT resource transformation in a post-migration the impact of cloud migration on
environment. the organizational culture,
structure and resources.
The analysis looked at both staffing and training.
The staffing analysis sought to determine if
agencies had sufficiently skilled resources to 85% Agencies have no plans in place
to reorganize staff workloads to
support cloud migrations and an awareness of
support emerging cloud
how cloud transformation would impact the
technologies.
organization. The training analysis focused on
how agencies prioritized cloud training and if there
74% Agencies expect staffing levels
were barriers preventing them from offering more to remain the same or slightly
training opportunities to staff. decrease over the next five
years.
Results: Staffing
The ITPS study and other HR data was used to 60% Agencies currently utilizing third-
determine the current state of IT staffing among party contractors to support
in-scope agencies. It provided information on job cloud technology deployments.
titles, job descriptions, classifications, salary
structures and the number of IT positions per
agency.
A matrix was developed to cross-reference Washington state IT position titles with equivalent
private sector IT job titles, as published by Gartner, in order to create a similar basis for the
analysis. The state’s IT functional areas do not completely align with the functional areas
provided by Gartner, so the cross-reference was based on industry experience.
In-scope agencies had a total position count of 66,979, of which 3,352 were IT positions,
representing 5% of the total. Gartner benchmark data suggests that IT staff should equate to
3.7% of an organization’s total position count in a cloud-centric environment. Applying this
benchmark to the universe of in-scope agencies indicates that 2,479 IT positions are needed for
a fully cloud-centric environment, suggesting a 26% reduction is possible.
However, it is important to understand that the Gartner benchmark is derived from studies of
single organizations – not a decentralized government enterprise like the state of Washington.
Duplication of IT positions across agencies is unavoidable. So, while fewer positions may be
needed in the long term, meeting the full reduction target suggested by this benchmark is
unlikely.

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When comparing IT staffing levels in an on-premises
environment to a cloud services environment, some Survey: Skills Shortage
positions will experience a greater degree of change
than others. For example, Gartner benchmarks suggest 70% Agencies have no staff
that server administrators managing 30 servers on- that possess cloud
premises could reasonably manage up to 10 times certifications with major
more servers residing in cloud services. Conversely, commercial cloud
agencies that had no dedicated IT architects may providers.
discover the need to have a cloud architecture team to
60% Agencies that allocate
manage technology deployments in the new cloud less than 10% of the
operating model. training budget for cloud
The benchmarks represent a new approach to skills.
deploying, managing and supporting technology in a
streamlined cloud services environment. While the
analysis suggests that there will be a surplus of IT staff
as cloud migrations occur, state HR data indicates that
the state of Washington experiences about 8% annual turnover in IT positions due to retirement,
attrition and other factors. Therefore, as state agencies develop cloud migration strategies and
start to realize operational efficiencies, natural turnover will help to maintain balance in the IT
staff workloads. Additionally, these efficiencies may carry over to third-party support
requirements as the need to utilize contractors may decrease.

Results: Training
Analysis of the agency survey results provided
additional insight to staffing challenges that agencies Survey: Biggest barriers to
may face while migrating to a cloud environment. The offering cloud training:
results indicate while most agencies have some form of
skills modernization plan in place to support cloud 25% No barriers to training.
technologies, there may not be enough awareness of
25% Avoid business
how that transition may impact IT staff and other
disruption due to
aspects of the organization. Financial data from the
unavailable resources.
state’s Agency Financial Reporting System (AFRS) was
used to establish a baseline for current and historical 19% Timeliness of applying
training expenditures. Since IT training is not new skills in the
represented separately from non-IT training, specific environment.
cost information was not available for use in the
analysis. Gartner reports that the industry benchmark 18% Inadequate training
for IT staff training is $1,544 per IT employee per year. budgets.
The agency survey provided some insight into how
training is funded and prioritized among agencies.
The results indicate that the percentage of agency training budgets targeting cloud skills
development is very low and cloud training in general is not prioritized. As the state pivots from
on-premises operations, lack of skills is likely to significantly impede the agency’s ability to
achieve rapid, large-scale migration to cloud services. Agencies will need to ensure that training
budgets adequately support widespread cloud training and certifications opportunities for IT staff.

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WaTech Support for Agency Migrations
WaTech is the state’s central technology services
agency and currently provides internet, wide area Cloud Services Brokerage
network, security and other services that agencies use to (CSB)
access to cloud services. To date, WaTech has been
able to support agencies as they migrate to cloud CSB is an IT role and business
solutions because activities have been largely in support model in which a company or other
of individual cloud projects rather than full-scale data entity adds value to one or more
center migrations. If multiple large-scale migrations occur (public or private) cloud services
on behalf of one or more
simultaneously, WaTech is understaffed in critical cloud-
consumers of that service via three
specialized disciplines to provide adequate support to primary roles including
agencies. aggregation, integration and
The Statewide Cloud Readiness Assessment concluded customization brokerage.
that WaTech should follow industry best practices in
(Source: Gartner)
providing centralized cloud support services so the state
can achieve maximum strategic and financial value from
cloud technologies. To do that, WaTech should transform its cloud support role to become a
Cloud Services Broker (CSB). Both Gartner and the National Association of State Chief
Information Officers (NASCIO) cite the cloud services brokerage model as a best practice for
state government IT.
In a 2019 NASCIO survey of 49 state CIOs, 48% said they planned to downsize their state-
owned data centers over the next three years, while 61% said they planned to expand their
managed services over the same period. The cloud services broker model introduces an
optimized method for agencies to procure and deploy cloud services. Agencies have the
flexibility to choose from a standardized catalog of cloud service options while having access to a
broad range of implementation and support services. This presents agencies with a streamlined
procurement and deployment process, greater efficiency using shared services and the most
competitive pricing available.
To support this model, WaTech will need to undergo a cloud skills modernization effort. Analysis
showed that additional staff will need to be hired or allocated and all cloud support staff will need
to be trained and certified in the cloud offerings of Amazon, Microsoft, and Google. WaTech
currently uses third-party contractors when specialized cloud expertise is required. It is possible
that increased staffing and skill levels will reduce the need for contractors, but these savings may
largely be offset by the associated staffing costs.
The projects required to transform WaTech for the cloud services brokerage role are identified in
the table below as GOV-2 Establish Cloud Services Broker, plus supporting sub-projects
identified as EA-1A, EA-1B, and EA-1C. This is the foundational set of projects required to
implement the broker model as a WaTech program and to outfit the program with the tools
necessary to carry out the broker mission. The total investment for this effort is estimated at
$25.5M over three years with an initial investment of $8.75M.

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 Proj. Project
Project Project Project 3 yr. Run-
Project Hours Hours Total Cost
Number Duration Cost Time Cost
(Mthly) (Total)
Establish
Cloud Services
GOV-2 7 3,840 16,520 $1,370,680 $5,773,720 $7,144,400
Broker and
CCOE
Enterprise
Application and
Infrastructure
EA-1A 9 4,660 21,540 $2,321,880 $4,531,200 $6,853,080
Configuration
Management
System (CMS)
Cloud Financial
EA-1B Management 9 7,650 40,670 $2,333,020 $4,091,580 $6,424,600
System
Cloud
EA-1C Management 9 2,280 16,480 $2,727,980 $2,356,270 $5,084,250
Platform
TOTALS 34 18,430 95,210 $8,753,560 $16,752,770 $25,506,330

Exhibit 3: Projects Required to Implement the Cloud Service Broker Program in WaTech

Cost/Benefit Analysis
The ROI for cloud investments can be difficult to measure as some of the greatest gains from
adopting a cloud services model are not financial in nature. Business agility, scalability, quicker
deployment cycles and improved capacity utilization will drive operational efficiencies, but they
may not be reflected in an agency’s bottom line.
Some cost savings are readily identifiable, such as the end-of-life decommissioning of on-
premises hardware and replacing it with equivalent cloud-based infrastructure as a service (IaaS)
compute environments. However, some cloud migrations may show no cost savings at all.
According to an article published by ISG (2), “For IaaS services, ROI will vary tremendously
depending on the size and type of workload going to the cloud. If you’re bursting a high-
performance computing application to the cloud during the two days per month when you need to
double its compute capacity, your payback could be significant. Meanwhile, applications with
relatively steady use may have modest returns or none at all.”
Another risk factor impacting cloud services ROI is the architecture of the applications and
systems as they exist in an on-premises environment. Cost/benefit models usually do not
account for system complexity, number of interfaces, development framework, or inter-system
dependencies in its normal daily operation. A September 2020 article from McKinsey (3) states
“the thousands of applications a large enterprise might have built over the past three decades
need remediation or re-architecting to run efficiently, securely, and resiliently in the cloud. In
some cases, companies have found existing applications cost more to run in the cloud before
remediation. Required investments often result in an unexciting ROI for cloud migration.”

(2) Cloud's ROI is More Than a Numbers Game

(3) How CIOs and CTOs can accelerate digital transformations through cloud platforms

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A transition from a Capital Expenditure (CapEx) to an Operational Expenditure (OpEx) financing
model offers opportunities for cost savings and positive ROI. The cloud’s “pay as you go”
methodology helps to right-size new technology investments by ensuring that agencies only pay
for capacity and services they need. For example, agencies typically procure hardware that is
configured for the worst-case operating conditions. This results in purchasing extra processing
power, memory and storage to handle the most demanding usage conditions, even if those
conditions never materialize. With OpEx, agencies purchase the capacity they need with the
ability to scale up or down as demand dictates without the long-term commitment and
operational overhead of CapEx investments.
The Statewide Cloud Readiness Assessment project uncovered several opportunities for broad
cost savings resulting from migration to commercial cloud computing. However, the scale of
measurable benefit these opportunities afford is highly dependent on the degree of preparatory
actions taken. The analysis and financial opportunities are presented in each of the sections that
follow.

IT Assets
A migration to cloud services reduces the need for ongoing server hardware purchases. With the
majority of agency applications residing within virtual servers, there should be little dependency
on the use of on-premises physical servers to run the applications. In most instances, agencies
can procure the equivalent infrastructure as a service (IaaS) from commercial cloud vendors and
migrate entire virtual servers to the cloud. This reduces the need to purchase and maintain
physical servers in an on-premises data center environment. The migration from hardware to
cloud services also introduces the shift from a CapEx to an OpEx cost model.
The asset analysis determined that in-scope agencies operate 11,275 virtual servers installed on
5,867 physical servers. Of those, 91% were determined to be good candidates for cloud
migration. A target of 9,000 virtual servers (80%) was used – a more typical success rate seen in
case studies – at a common cloud server rate of $188.99 per month for that number of servers.
This example rate was based on a three-year contracted price with Microsoft Azure and was the
current price published at the time of the analysis.
A comparison was made with 80% ($62.4 million) of the amount agencies spent in FY2020 on
server hardware with the estimated monthly cost of $188.99 per cloud server. Included in the
calculation are costs associated with all nine recommended projects summarized in the
Recommended Projects section and detailed in Appendix J of the Unisys report. Adjusting for the
9,000-server scope, the analysis shows a five-year ROI of 47% and a net benefit of $60 million.
An optional tenth project, (EA-9) Portfolio Rationalization & Cloud Optimization, is not included in
the ROI calculations. It is expected that some amount of optimization will be necessary to move
applications, but that is already factored into the migration estimates. The optional EA-9 project
is recommended to achieve maximum business and strategic benefit from the cloud, but it is not
required to achieve the expected ROI. Those systems that require extensive remediation will
have to be assessed on a case-by-case basis and may simply remain on-premises until
replacement becomes financially viable.

15
 47% ROI, $60M Net Benefit, by Moving 9000 Virtual Servers to Cloud Computing Services

Transition
Year 1 Year 2 Year 3 Total
24-36 mo.
80% of FY20
Server Hardware $62,385,632 $62,385,632 $62,385,632 $187,156,896
Costs
Future Cloud
Services Compute ($20,410,920) ($20,410,920) ($20,410,920) ($61,232,760)
Environments
9 Recommended
Cloud Migration
($44,347,590) ($7,173,097) ($7,173,097) ($7,173,097) ($65,866,881)
Projects & Run-
time costs

Benefit ($44,347,590) $34,801,615 $34,801,615 $34,801,615 $60,057,255

ROI 47%

Exhibit 4: ROI Calculations for the Recommended Migration Scenario

The calculation above represents the recommended scenario that achieves a reasonable net
benefit and ROI with moving 9,000 servers, or 80% of total IT assets. Moving additional servers
to the cloud will improve these numbers. This approach establishes an optimized model to invest
in future training, optimizing processes, and technology innovations with tools to maximize cloud
service benefits.

IT Staffing
Following the transition from on-premises IT operations to the widespread use of cloud
computing services, agencies may find that increased efficiencies in cloud technologies require
fewer IT staff to support operations. This report does not advocate for a reduction in IT staff
across agencies, but it may be possible to realize additional savings by using the natural attrition
rate to balance the IT workforce. Unfortunately, the amount of savings is very difficult to estimate.
Unisys, through a review of publicly available data, determined the state averages 10% annual
employee turnover for all positions and assumed this average would hold true for IT staff as well.
Therefore, the Unisys report suggests a best-case scenario whereby the state could realize an
additional net savings up to $56 million by leaving all these vacancies unfilled.
However, after Unisys completed their report, the OCIO asked the Office of Financial
Management, State Human Resources Division, for more information. They provided very
detailed data that showed average annual turnover for classified IT positions is just under 8%.
Using this number, savings up to $44 million may be possible by not filling vacancies as they
occur over time.
It must be noted, however, that even this level of savings is not likely as agencies fill vacancies
with the skilled staff needed to embrace the innovation and transformation opportunities of the
cloud. Most CIOs report no FTE reductions are anticipated by moving to the cloud.

16
IT Maintenance Contracts
Analysis showed that the in-scope agencies spend an average of $62 million per year for IT
hardware assets with annual maintenance costs for both hardware and software running at about
15% of the original purchase price – roughly $9 million per year. Those maintenance costs
present a significant potential for cost savings as agencies migrate to cloud services and
continue the shift from a CapEx cost model to an OpEx cost model.

WaTech Private Cloud Service

WaTech offers a private cloud service known as the Washington State Cloud. This is a managed
service that caters primarily to small and medium sized agencies with limited IT staff. Because of
this, most private cloud customers elect the full-support option which, along with WaTech
hardware and staffing costs, pushes per server rates substantially higher than rates advertised
by commercial public cloud providers.
The private cloud fills a specific business need for agencies requiring higher levels of support or
for applications that cannot operate efficiently or securely in a public cloud environment. It is not
intended to compete with commercial public cloud services on a large scale. However, the
analysis showed that if there was a significant increase in agencies using the WaTech private
cloud, WaTech would need to increase staffing and training to support the additional demand.
Other analysis conducted for IT assets and contract data suggests that the private cloud may
benefit by migrating from on-premises hardware to public cloud infrastructure. While this may
offer savings on future hardware purchases and associated maintenance, it overlooks many of
the business and technical reasons customers have for choosing the private cloud.
While not specifically addressed in the Unisys report, WaTech may achieve savings by moving
from CapEx to a cloud-like OpEx cost model for private cloud hardware. This maintains the
option for agencies that need the service while providing lower operating costs and service rates
for customer agencies.

Recommended projects
The Statewide Cloud Readiness Assessment recommends nine major projects organized around
three themes: Enterprise Architecture (EA); Governance (GOV); and Workforce (WF). Eight of
the projects prepare the technical environments and organizations for cloud migration. The ninth
is an umbrella program to oversee the actual cloud migration initiatives. The tenth project is the
optional EA-9 Portfolio Rationalization and Optimization effort. The OCIO endorses this
approach to prepare, manage, and support a large-scale multi-agency cloud migration.
The projects shown in the table below work together to support the state’s cloud strategy and
provide optimal strategic value. The projects are listed in priority order with the first two being the
most important. While it is possible to implement some or none of the others, doing so would
introduce additional risk and reduce the long-term sustainability and strategic value of the state’s
cloud environment.
The OCIO recommends executing all the projects identified in the table below beginning with
(GOV-2) Establish Cloud Services Broker. Many of these projects will be implemented in parallel.
Refer to the sequence chart that follows the table for more detail.

17
 Recommended Projects Key Opportunities Benefits
 Define criteria for vendor
(GOV-2) Enterprise Cloud  Improve procurement, contracting and project
selection.
Service Broker and Cloud management by establishing consistent service
 Establish a CCOE for
Community of Excellence levels, cost structures and metrics for cloud
defining best practices and
(CCOE). adoption.
community governance.
 Shift costs to OPEX and on-demand solutions
 Evaluate and plan with cost management and governance.
(EA-4) Cloud migration application migrations.  Reduce or eliminate agency data centers for
projects.  Migrate selected cloud services.
applications to the cloud.  Support budget and business changes by right-
sizing application infrastructure.
 Establish an application
infrastructure inventory
 Track applications and infrastructure to
(EA-1) Cloud management program.
maintain assets more consistently.
Management Tools.  Provide shared cloud
 Identify opportunities to reduce operational
Includes EA-1A, EA-1B, automation tools.
costs as applications retire or move to the
EA-1C.  Add continuous cloud
cloud.
financial management
across the enterprise.
 Manage and provide enterprise standard
(GOV-5) Cybersecurity
 Security frameworks and security services in the cloud using
and Risk Management
data protection. standardized security tools, platforms, and
Governance.
approaches.
 Improve network capacity and resilience for
 Evaluate network bandwidth
(EA-3) Network agency locations as applications shift from on-
and data flow changes
Optimization for Cloud premise to cloud environments
required to support cloud
Services.  Take advantage of available network services
adoption.
to support cloud use.
 Establish cloud-focused
federated identity services
 Provides a single sign-on and integration for
and platform.
cloud services and administrative access.
(EA-11) Federated  Provide a flexible platform to
 Promotes improved security and user
Identity Management. support privileged access
experience by using the state employee's AD ID
management, multi-factor
to access cloud services and applications.
authentication and Active
Directory (AD) integration.
 Investment in training staff and career
(WF-6) Workforce development.
 Skills Management Process.
Planning Initiative.  Rebalance IT staff and retirements
 Reduce External Labor.
 Establish agency cloud
adoptions and operations
 Use standards, tools, operations based on the
team(s).
(WF-10) Establish Cloud agency scale and current needs.
 Implement cloud accounts
Ready Operations.  Drive cloud adoption through bi-modal
and landing zone
operations for cloud and current IT services.
environments based on
agency requirements.
 Develop an organizational  Provide the process guidance, communications,
(WF-7) Organizational
change management and collaboration to support the agencies to
Change Management.
strategy. maximize the results of cloud adoption.
OPTIONAL: (EA-9)  Identify application  Align application technology use and costs to
Portfolio Rationalization & modernization candidates to appropriate cloud services to benefit from the
Cloud Optimization use available cloud services. scalability and newer services.

Exhibit 5: All Recommended Cloud Preparation and Migration Projects

18
The sequence chart below shows the dependencies between the projects and how they should
be implemented over time. Note that “GOV-2, Establish the Cloud Services Broker,” begins as
soon as possible in FY2021. This is because the functions provided by the Cloud Services
Broker program are foundational to cloud migrations and operations. In order to align to the
timetable below, $1.37 million in funding must be invested to establish the Cloud Services Broker
program. Delay of this work would push all project timelines out a minimum of seven months.
Ideally, all projects would be implemented, and migrations occur over the course of three to five
years. However, EA-4 Cloud Migration Projects, is expected to extend through FY27 because of
budget cycles and the amount of preparation required. The optional EA-9 project may extend
beyond FY27 depending on funding and the extent of remediation required.

Exhibit 6: Preparatory and Migration Projects Sequence of Implementation

This is a notable risk because the de-centralized nature of the IT operations across state
agencies, coupled with state and federal funding constraints, are significant risks to large-scale
cloud migration and solution adoption. These factors may result in additional preparation time
and an increase of up to 30% in costs for agencies to complete their migration projects.
Additionally, demand for centralized services from WaTech to support the migration of nearly 70
agencies may substantially extend the timeline to complete all migrations. Likewise, risk,
timelines and cost increase if all agencies do not participate in program governance and
collaborate to migrate co-dependent applications.
To help mitigate these and other potential risks identified during the cloud readiness assessment,
all recommended projects are necessary. The table below is another view that depicts all the
recommended projects, their expected duration and total cost of investment. These costs, with
exception of optional EA-9, are included in the ROI calculations in the Cost/Benefit section.

19
 Project Project
Project Project Run-Time
Project Hours Hours Project Cost Total Cost
Number Duration Cost
(Mthly) (Total)

Enterprise Application and

Infrastructure Configuration
EA-1A 9 4,660 21,540 $2,321,880 $4,531,200 $6,853,080
Management System
(CMS)
Cloud Financial
EA-1B 9 7,650 40,670 $2,333,020 $4,091,580 $6,424,600
Management System
Cloud Management
EA-1C 9 2,280 16,480 $2,727,980 $2,356,270 $5,084,250
Platform
Establish Cloud Service
GOV-2 7 3,840 16,520 $1,370,680 $5,773,720 $7,144,400
Broker and CCOE
Network Optimization
EA-3 Assessment for Cloud 9 3,315 11,720 $831,160 N/A $831,160
Services
EA-4 Cloud Migration Projects 24 32,120 164,560 $21,874,230 N/A $21,874,230
Cybersecurity and Risk
GOV-5 6 1,980 11,880 $923,040 N/A $923,040
Management Governance
Workforce Planning
WF-6 6 2,600 15,600 $1,438,980 $1,462,200 $2,901,180
Initiative
Organizational Change
WF-7 18 4,660 21,540 $7,070,240 N/A $7,070,240
Management
Establish Cloud Ready
WF-10 12 3,730 14,900 $1,156,700 N/A $1,156,700
Operations
Federated Identity
EA-11 Management - Cloud and 9 3,840 17,040 $2,121,480 $3,304,321 $5,425,801
Privileged Access
Cybersecurity and Risk
GOV-8 Management - Constituent 3 1,130 3,390 $178,200 N/A $178,200
Identity Standards
OPTIONAL: Portfolio
EA-9 Rationalization & Cloud 18 47,960 135,000 $15,344,360 N/A $15,344,360
Optimization

Required for
Total Project Hours 490,840 $44,347,590 $21,519,291 $65,866,881
Transition
OPTIONAL-
Average Hours Per Month 13,634 Recommended for $15,344,360 N/A $15,344,360
Optimization
Target Months 36 Total $59,691,950 $21,519,291 $81,211,241

Exhibit 7: Investment Required for Cloud Readiness and Migration Projects

(Note: Table is adapted from Unisys report section 13.5.5 Project Cost Summary. This table includes some minor
corrections to cost estimates that are in error in the Unisys report.)

20
State Cloud Migration Plan
Overview
The following plan is derived from findings and
recommendations of the Statewide Cloud Readiness Cloud as Innovation Driver
Assessment as well as other sources, such as Gartner,
• Focus on innovation
McKinsey, Deloitte and NASCIO. These sources agree on
capabilities enabled by the
most concepts of cloud strategy especially in the key area
cloud (not just cost
of motivation for cloud migration. For example, according to savings).
the Deloitte Government Trends 2020 report, “Cloud as
• Introduce cloud-focused
Innovation Driver,” for the past decade governments have
policies.
focused on cloud computing as a less expensive way to
• Break data silos.
store data and run applications.
• Define the spectrum of
But increasingly, the value proposition of cloud technologies identity access
is shifting from just cost savings to greater value. The cloud management.
is an integral part of most digital transformations and in • Understand the
2019 the National Association of State Chief Information organizational changes the
Officers (NASCIO) named cloud the top technology issue shift to cloud might demand
facing state CIOs. and make a deliberate
change management plan.
Cloud computing is the foundation for emerging
technologies that governments are increasingly using such (Source: Deloitte Center for
as artificial intelligence, robotic process automation, the Government Insights)
Internet of Things, and big data analytics. So, while shifting
to cloud may or may not reduce costs, investment in cloud
can be justified by the greater value that it can deliver.
The following sections outline recommended goals and a plan to achieve those goals. This plan
strives not only to realize savings but also to lay the strategic foundation required to support
innovation and emerging technologies. It includes deliberate strategies for managing change and
sets the state on a firm path to digital transformation.

Strategic Goals
• 100% of budget requests for new IT systems target cloud solutions after June 20, 2022.
• An average of 20%, or about 650, eligible applications are migrated from existing on-
premises servers to cloud solutions each year from FY23 through FY27.
• 80% of individual cloud migration projects achieve positive ROI within three years
following project close.
• 20% of staff positions identified for cloud support roles achieve necessary certifications
each year beginning in FY22.
• 10% reduction in SDC annual operations costs achieved by FY26.

21
State IT Strategy and Policy Changes
Update Cloud Strategy
• The New Cloud Strategy is “Cloud-only”, meaning agencies shall adopt cloud solutions
for all new IT system investments. Existing IT systems shall be migrated to cloud
solutions unless doing so imposes an unmanageable challenge, such as business,
financial, technical, security or compliance (see updated policy for order of preference).
o Previously, agencies were encouraged to “think Cloud-first”, meaning they should
consider cloud solutions before investing in on-premises IT solutions.

Update State Data Center (SDC) Strategy

• Policy definition of “State Data Center” is expanded to include a cloud-based virtual State
Data Center.
• RCW 43.105.375 remains in full effect – “state agencies shall locate all existing and new
servers in the state data center.” Going forward, agencies are directed to host servers in
the new cloud-based virtual State Data Center instead of the physical State Data Center
buildings located in Olympia and Quincy.
• After June 30, 2028, agencies will no longer be authorized to operate compute and
storage equipment in either the Olympia or Quincy State Data Center buildings without an
approved waiver.
• The Olympia SDC will consolidate operations from two data halls into one by December
31, 2026.

Update State IT Policies

• Policy definition of “State Data Centers” is expanded to include a Virtual State Data
Center, centrally enabled and optimized by the WaTech Cloud Broker program. RCW
43.105.375 remains in full effect – “state agencies shall locate all existing and new
servers in the state data center.”
• All physical compute and storage hardware must be retired, and applications and data
moved to cloud-hosted solutions no later than June 30, 2028.
• After June 30, 2022, all new IT initiatives must use cloud solutions. No purchases of
physical compute or storage equipment will be approved after June 30, 2022.
• When planning for new solutions or migrating existing systems to cloud solutions,
agencies will assess resiliency requirements and acquire appropriate cloud-based
services for data protection, high-availability and disaster recovery.
• Agencies will evaluate cloud solutions in the following order of preference:
o Software as a service (SaaS), if a viable commercial option is available.
o Virtual State Data Center – Centrally enabled Infrastructure as a Service (IaaS) plus
select Platform as a Service (PaaS), and other XaaS (delivery of anything as a
service) offerings for hosting compatible commercial off-the-shelf (COTS) software,
custom developed software, and legacy applications.

22
 o WA State (Private) Cloud – Infrastructure as a Service (IaaS) for applications with a
business case for high performance, low latency, isolation from public clouds, or
additional managed support services.
o Proprietary Platform-as-a-Service (PaaS) or managed service providers for
applications that require a unique platform that cannot be provided by the Virtual
State Data Center or WA State (Private) Cloud.
• By June 30, 2022, agencies will report to the OCIO:
o A list of all applications with target dates for migration.
o A list of applications that present an unmanageable challenge to cloud migration with
intent to request waivers.
• Agencies will report migration progress to the OCIO as part of the annual certification
process.
• Waiver requests will be evaluated on the merits of a documented business or technical
challenge that cannot be managed or mitigated by any reasonable means.

State IT Workforce Strategy

State CIOs report only 30% have staff experienced or certified in cloud support skills. Necessary
expertise can be contracted for initial planning and migrations, but cost-effective, long-term
support will require a state IT workforce skilled in areas such as cloud architecture, development,
security, compliance and operations.
• The State Chief Information Officer, working through the Information Technology
Professional Structure (ITPS) governance committee, will jointly lead a statewide IT
workforce training and recruitment initiative to increase cloud-related skills of the state
workforce. The initiative will:
o Sponsor the WF-6 Workforce Planning project;
o Work with agencies to identify new positions and skills required to support cloud
adoption and migration; and
o Work with DES to bring industry-leading, cost-effective cloud certification training
programs to state agencies.

Preparing for Migration

The OCIO endorses the migration approach developed by the Statewide Cloud Readiness
Assessment project. Ten major initiatives are recommended and organized around three
themes: Enterprise Architecture (EA); Governance (GOV); and Workforce (WF). In order to
prepare for, manage, and support a large-scale enterprise migration to the cloud, all projects
should be implemented as described in the Recommended Projects section.
A subset of eight planning and preparatory projects are essential to upgrade the security and
technical environments and ensure WaTech and other agencies can begin planning for the
inevitable operational and organizational changes to come. These projects must be initiated in
the first two-year planning and preparation phase in order to meet a five-year migration timeline
and achieve the expected ROI benefits. WaTech is the lead agency for all GOV and EA projects
and a primary stakeholder in the WF projects.

23
 Preparatory Projects Key Opportunities Benefits

 Improve procurement, contracting,

(GOV-2) Enterprise Cloud  Define criteria for vendor selection.
and project management by
Service Broker and Cloud  Establish a CCOE for defining best
establishing consistent service
Community of Excellence practices and community
levels, cost structures and metrics
(CCOE). governance.
for cloud adoption.
 Establish an application
 Track applications and infrastructure
infrastructure inventory management
to maintain assets more
(EA-1) Cloud Management program.
consistently.
Tools. Includes EA-1A, EA-  Provide shared cloud automation
 Identify opportunities to reduce
1B, EA-1C. tools.
operational costs as applications
 Add continuous cloud financial
retire or move to the cloud.
management across the enterprise.
 Manage and provide enterprise
(GOV-5) Cybersecurity and
 Security frameworks and data standard security services in the
Risk Management
protection. cloud using standardized security
Governance.
tools, platforms, and approaches.
 Improve network capacity and
resilience for agency locations as
 Evaluate network bandwidth and
(EA-3) Network Optimization applications shift from on-premise to
data flow changes required to
for Cloud Services. cloud environments.
support cloud adoption.
 Take advantage of available network
services to support cloud use.
 Provides a single sign-on and
 Establish cloud-focused federated
integration for cloud services and
identity services and platform.
administrative access.
(EA-11) Federated Identity  Provide a flexible platform to support
 Promotes improved security and
Management. privileged access management,
user experience by using state
multi-factor authentication and
employee AD ID to access cloud
Active Directory (AD) integration.
services and applications.
 Investment in training staff and
(WF-6) Workforce Planning career development.
 Skills Management Process.
Initiative.  Rebalance IT staff and retirements.
 Reduce external labor.
 Use standards, tools, operations
 Establish agency cloud adoptions
based on the agency scale and
and operations team(s).
(WF-10) Establish Cloud current needs.
 Implement cloud accounts and
Ready Operations.  Drive cloud adoption through bi-
landing zone environments based on
modal operations for cloud and
agency requirements.
current IT services.
 Provide the process guidance,
(WF-7) Organizational  Develop an organizational change communications, and collaboration
Change Management. management strategy. to support the agencies to maximize
the results of cloud adoption.

Exhibit 8: Planning and Preparatory Projects

Asset and Application Migration

The cloud readiness assessment team conducted a high-level analysis of more than 4,300
applications and concluded that up to 91% are favorable candidates for cloud migration. The
projects that address migration activities are shown in the following table and designated EA-4
and EA-9.

24
 Migration Projects Key Opportunities Benefits
 Shift costs to OPEX and on-demand solutions
 Evaluate and plan with cost management and governance.
(EA-4) Cloud migration application migrations.  Reduce or eliminate agency data centers for
projects.  Migrate selected cloud services.
applications to the cloud.  Support budget and business changes by
right-sizing application infrastructure.
 Identify application
OPTIONAL: (EA-9) Portfolio  Align application technology use and costs to
modernization candidates
Rationalization & Cloud appropriate cloud services to benefit from the
to use available cloud
Optimization scalability and newer services.
services.

Exhibit 9: Cloud Migration Projects

The EA-4 Cloud Migration project is the main umbrella project that covers evaluation, planning
and migration of compatible applications. Many applications will be easy to move, however,
others will require more in-depth analysis of system architecture, licensing, run-time
characteristics, inter-agency dependencies, data flows and unique characteristics that could
impede an application’s cloud performance and drive up costs. Those applications must be
identified and then remediated as part of the EA-9 Portfolio Rationalization & Cloud Optimization
project. If they are not remediated, then they will remain running in the State Data Center or the
WaTech private cloud service until they can be replaced with a native cloud solution.
Agencies will conduct the following activities as part of cloud migrations:
• Work with WaTech to implement a statewide configuration management database and
automated discovery tools to identify existing system configurations and assess inter-
agency dependencies and impacts of migration (see EA-1A project).
• Assess existing applications for ability to efficiently operate in a cloud environment.
Identify those that require in-depth analysis and potential remediation (see EA-4 and EA-
9 projects).
• Document a cloud migration plan and schedule for existing applications, considering the
end-of-service dates for compute and storage devices. Identify a target cloud platform for
each application in order of preference outlined in policy (see EA-4 project).
• Develop a plan to train and/or augment technical staff needed to securely and efficiently
manage new cloud environments (see WF-6 project).
• Identify funding needs and develop budget requests as required.
• Participate in enterprise planning and governance activities led by WaTech (see EA-4
project).
• By the dates set forth in policy, provide the OCIO (see EA-4 project):
o A list of all applications with target dates for migration, prioritizing applications
operating on servers nearing end of service life.
o A list of applications that present unmanageable challenges. Submit waiver requests
to the OCIO along with mitigation plans that minimize investments in new server
hardware.
o Annual migration progress reports.

25
WaTech Agency Support Strategy
• Establish a WaTech Cloud Services Broker program to optimize cloud operational costs,
manage cloud vendor relationships, and assist agencies with cloud migration. The broker
program oversees cloud procurement and contract management, vendor management,
service level management, and cost optimization. The broker program provides
consulting services to agencies in areas such as cloud solution design, automation tools,
security, compliance, and migration planning (see GOV-2 and EA-1B projects).
• Establish a Cloud Migration Program office, in coordination with the Cloud Services
Broker program. The purpose is to monitor and orchestrate agency cloud migrations to
ensure consistency and best practices. This program will coordinate with the WaTech
Broker Program to perform migration activities for smaller agencies if required. The
program will coordinate with the agencies’ cloud migration projects to maintain application
dependencies (see EA-4 project).
• Enhance WaTech staffing and skills for large-scale cloud operations. New skills and
resources are needed in cloud procurement and contract management, vendor
management, service level management, solution design, automation, security and
compliance, project management, and consulting (see WF-6 project).
• Implement a statewide configuration management database (CMDB) and automated
discovery tools to help identify and document the currently unknown relationships and
dependencies between systems and to understand potential impacts of migration. The
state needs this detailed information in order to determine best candidates for migration
and to minimize security risks and service interruptions to constituents (see EA-1A
project).
• Create and enable a virtual State Data Center as an extension of the physical State Data
Center. The virtual SDC will provide agencies a standardized environment offering
security, compliance, disaster recovery, and efficiency through automated management
and cost optimization tools (see EA-1C project).
• Where possible, migrate the Washington State (private) Cloud hardware assets from a
CapEx to OpEx model. This will reduce operating expenses and provide better rates to
customers (see EA-1C project).
• Lead a statewide cloud migration stakeholder group, the CCOE, to facilitate sharing
information and experiences between agencies and to provide WaTech with input on
administration of the virtual State Data Center (see GOV-2 project).

26
Next Steps: Establish Cloud Services Broker Program at WaTech
The OCIO recommends the state take several steps to capitalize on the full potential of a
strategic investment in cloud technology, including formally adopting a “cloud-only” strategy,
along with supporting policies and standards.

Policy alone cannot achieve the desired long-term benefits. While experts agree that when
properly implemented the cloud can save money, the key phrase is “properly implemented.”
Many organizations do not achieve the expected savings because they “lift and shift” their old
expensive and outdated systems onto modern cloud servers and expect them to run better and
cost less. This is a bad strategy. If such systems are not modified or replaced, then cloud costs
will escalate, and the state’s business and customers will suffer.

The plan presented here recommends implementing nine projects, starting with GOV-2 Establish
Cloud Services Broker. This is the foundation of a “properly implemented” cloud migration. Not
only does the Cloud Services Broker oversee operations of the state’s virtual State Data Center,
but it also puts in place the processes and tools to optimize cloud contracts, monitor and
automate cloud operations, and keep costs from escalating out of control. Without these
processes and tools in place, the state will not see significant savings.

Standing up the Cloud Services Broker program will take time and funding. WaTech needs $1.37
million in FY2021 to jump start the program so it is operational by July 2021 when the other
projects begin, but additional funding will be needed to implement tools and sustain program
operations. WaTech could leverage its fund balance for the initial investment, but without it all
project timelines would be pushed out a minimum of seven months.

Implementing these recommendations has the potential to result in significant cost savings but
equally important it positions the state to deliver superior service to constituents. Moving to the
cloud is clearly in the state’s best strategic interest. It is imperative to make smart, strategic
investments to enhance the state’s security posture, modernize its IT infrastructure and digitally
transform the way government does business.

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