Big data is being used to help transform government by revealing information and patterns that can bring innovation, better services, and smarter decisions.
To effectively use big data, we must be willing to collect, analyze, and share the information we discover. You already know about some of the ways we’re helping the government buy smarter through big data: GWAC Prices Paid Tool, horizontal and vertical pricing in Schedule 70, and Reverse Auction pricing data.
Here is something you may not have heard a lot about: GSA’s major telecommunications program, Networx, collects data about what federal agencies are purchasing and how much they are paying. Because most federal agencies make network services purchases through the Networx program, these “big data” details from Networx provide a good picture of the federal networking and telecommunications market — and we’re happy to share it.
We’ve just completed an analysis of the first half of fiscal year 2014. And, it’s a good time to look at how federal agencies are using the Networx contracts and the trends we’re seeing in telecommunications buying.
In total, more than 136 federal agencies use Networx. Federal agencies have purchased $762 million in network and telecommunications services off the Networx contract through the second quarter of FY 2014. During the same period last year, federal agencies purchased $630 million through Networx. After accounting for FY 2013 purchases through now expired legacy contracts, this represents a year-over-year increase of 12.8% on the Networx contracts. The projected yearly increase we’re seeing is an indicator that agencies are utilizing Networx more often than ever to solve their network services solutions.
Networx Buying Trends
GSA attributes this growth in usage to a couple of factors. First, federal agencies are using Networx to purchase more services because of increased bandwidth demand. More applications, more video, and more data all drive the need for more bandwidth. When was the last time you were not online? The two largest in-demand core services on Networx are Internet Protocol Based Virtual Private Network and Managed Network Services. Government agencies have increased purchasing of these two services by 24% and 36% respectively in FY 2014.
Second, due to transition and increased activity at call centers at several civilian agencies, toll-free services and call center services have seen year-over-year purchase increases of 62% and 288% respectively.
|Purchase Increases by Service from FY 13 to FY 14||Percentage of Increase|
|Network-Based Internet Protocol Virtual Private Network Service||24%|
|Managed Network Services||36%|
|Toll Free Services||62%|
|Call Center Services||288%|
Increases in bandwidth-driven services more than offset declines in legacy services like long distance voice, which is down 5% from FY 2013. Legacy networks that are based on the Asynchronous Transfer Mode and Frame Relay protocols have largely disappeared. They are down 8% and 31% respectively since last year and, combined, now account for less than 1% of federal purchases.
|Purchase Decreases by Service from FY 13 to FY 14||Percentage of Increase|
|Long Distance Voice Service||-5%|
|Asynchronous Transfer Mode||-8%|
|Frame Relay Service||-31%|
Beyond these core services, purchases of storage services (Network Attached Storage, Storage Area Networks, and Backup and Restoration Services) through Networx continue to grow. Storage services are a small part of overall use on Networx, but GSA considers this a bellwether for enhancement of traditional bandwidth with cloud services like Infrastructure as a Service.
Buying trends on Networx are expected to continue strong in the second half of FY 2014, but at a decreased growth rate compared to the first half of the year. Demand for bandwidth through IP based virtual private networks is expected to grow as an overall trend; however, the large purchase growth in toll-free and call center services will taper as several large federal call centers complete modernization efforts and roll into steady-state operations.
Savings Compared to Commercial Pricing
In the first two quarters of FY 2014, the Networx program saved taxpayers and agency users $332 million. This is slightly more than the $328 million savings we originally anticipated for this point in the year. Networx is on target to meet our goal of saving federal agencies at least $659 million this year. We base the Networx savings calculations on a comparison of Networx pricing, commercial pricing for similar services, and Networx usage.
The GSA Network Services Program continues to have a two-pronged focus: deliver today and plan for tomorrow. Our focus for today with Networx and our other telecommunications acquisition vehicles (including FSSI Wireless BPAs, Connections II, Commercial Satellite Program, and a full range of regional and local voice, data, video, Internet and other service offerings) is to continue to save taxpayer dollars and deliver what agencies need in telecommunications services. For example, we are making Networx process changes to lower the transaction cost of purchases and price changes to lower per unit service costs.
Looking to the future, with NS2020, we are in the midst of developing new acquisitions and service delivery models to help structure and enhance future government telecommunications both globally and locally.
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