 Live from Washington DC, it's Cube Conversations with John Furrier. Hello, welcome to a special Cube Conversation. I'm John Furrier, co-host of theCUBE here at Amazon Web Services Public Sector Headquarters in Washington DC, actually in Arlington, Virginia. Our next guest is Joel Lipkin, who's the Chief Operating Officer of Four Points Technology. Thanks for joining me today. John, thanks very much. So we're having an innovation day here in DC, getting the lay of the land on Federal and GovCloud. All things, public sector, had an exclusive with Threats Carlson at AWS. Trying to get the sense of where the change is happening and where the pressure points are. You've been involved in Federal for a while. Right. Where's the pressure points? Where's the change and where is it happening? It's interesting, you know, Cloud has been the mantra in Federal for since 2011, I think, was the Cloud First policy, 2011, 2012. But within the last 18 months or so, we're really seeing a hockey stick effect where all of the missionary work and development work and technical and cultural changes that were happening before are now taking hold and you're really seeing Cloud adoption explode in the Federal space. So there's a hockey stick happening. We're seeing that, people have been observing it. I haven't really seen the hockey stick numbers, but commercial Cloud, as Amazon's calling it, Cloud in general is interesting. John Woods from Tell Wells was just on, sharing his perspective that the game is going to the Cloud eventually. And so, where is the commercial Cloud in your mind with respect to in the hands of the practitioners who are either deploying services to the Federal government, so you get the consumption side and the Federal side, then you have the channels that are going to be providing those solutions and in some cases, they were all manual professional services with some software. Now you have Cloud, you got some automation, you got some DevOps. How is that channel changing? Well, we come to Cloud from a background very much on provisioning the traditional physical data center, servers, storage, networkings, application and operating system, software, security tools. And that business still exists certainly in Federal, but it's tipped, so that for four points technology, Cloud provisioning has become actually our largest segment within our business, within the last year, in terms of revenue, in terms of mind share, in terms of new contract awards. You know, we've seen that the customer fundamentally change in the last few years from trying out Cloud, to hosting externally facing websites and prototype environments in the Cloud, to now where most of our core customers are looking at building virtual enclaves, virtual data centers in a hyperscale Cloud and the public Cloud, Gov Cloud, depending on their needs. And that's where their focus is going, that's where they're investing, their technical resources, their training focus, so that that shift is, turns you from a resale model to very much of support the new virtual infrastructure model. I mean, I think about reselling, I mean, you're essentially bringing a product to a customer in a reselling packaging way. I mean, you're still touching the customer on the front lines, you're still providing that value. Now as you shift to, as you see more activity points to Cloud as consumption as legit real deal. It absolutely is. I mean, we're seeing the numbers where we've been at Cloud for slightly over five years now and our first year, I think we did somewhere in the order of $10,000 in sales for a lot of work, a lot of. You take a lot of pain on that one. But learnings. We learned, our customer learned. We invested very heavily in figuring out with the customer how to use GWAC contracts, GSA schedule, SUP-5, SUP-4 at that time, CIO CS, basic contracts, figure out how to bring Cloud to those contracts so that it was easy and safe for contracting officers to utilize. And, you know, that $10,000, we're several thousand times ahead of that now. And most of that expansion has been in the last year and a half. Talk about that flywheel or the tipping point, maybe a better word for it. Teresa Carlson shared some intimate information about her early days and how, and she had to grind it out. Here in DC. Security was an issue and they did the work. You guys did the work. This is the pattern, right? At some point you got to jump in and take the leap of faith, do the work. So for folks that are looking to move to the Cloud, whether they're on the IT side of the government or someone who wants to be a service provider in some capacity, what is the leg work now these days? Has it gotten harder? Has it gotten easier? Is it the same or is it the same format? You got to pay your dues, do the work. I mean, I think a lot of the missionary work has been done. I mean, in terms of contracts being Cloud friendly by nature, I think that's happened. I think increasingly you have an educated contracting force within government who understands Cloud better and how to procure it. So a lot of the mechanical things have been done. Also, I think there's a lot of success stories out there so that customers feel like they're not trailblazing necessarily, maybe within their specific agency, but there's lots of best practices out there. Just to look right at this, when you get a hockey stick opportunity, you don't know where you are on the hockey stick so it's still gonna be a lot more growth. I would think for it's still early days. Let's talk use cases. What use cases are you seeing? How are they evolving? What are some of the low-hanging fruit use cases? Where are the higher margin ones? Where do you see the opportunity? Yeah, for us, we're in an interesting spot because four points as a company tends to do very good contract management, very good program management, pre-sales consulting, very focused sales organization on the cloud and surrounding software, but we tend to work with partners to deliver services. The MSP services, the subject matter experts, we tend to work with top partners for that. And for us, that's worked very well because in some cases you have customers who have those resources in-house already. Sometimes they have systems integrators in-house and what we've found is that in different agencies, sometimes you want a different partner who actually understands that agency's mission the best. So I gotta ask you about product cloud because remember, go back to the old models of channels of distribution and resellers of ours, Vabs, they have all different programs. There's always a mix of multiple vendors all vying for the mind share of the partner who has the customer, in your case, you guys. So now you have multiple cloud players coming in Amazon and others, but there's some interesting dynamics in federal that are different than, say, in the general commercial space, which is you get classified information. You got sensitive, classified, publicly available. So websites, okay, level playing field, but Amazon vis-a-vis others has, yeah. Tremendous investment in dealing with government. And that's really at every level. I mean, you certainly see the tip of the iceberg in the highly classified world, but even just to get into the federal space at all in terms of FedRAMP compliance, which is not a one-time large check. It's ongoing, lots of large checks to not just get, but to maintain specialized compliance in terms of healthcare verticals, in terms of law enforcement verticals. Significant, significant investments in building that infrastructure that then lets our customer issue contracts in which they can use to add the extra controls that that specific agency. So not all clouds are the same. Not at the agency level and certainly not at the hyperscale cloud provider level. There's very few who make that investment consistently. So you mentioned the activity you guys are doing in cloud provision. What are some of the high demand services that their customers are asking for you guys? Where we found a sweet spot is doing account setup, provisioning, support, escalation, a lot of technical consulting around best practices and architecture versus the managed service provider on ongoing model. What our goal is to get the customer successfully into production as quickly as possible because that's why they bought into the cloud. For us, that means really smart provisioning, a lot of architecting with a partner, typically with AWS and the AWS space, obviously. And sometimes taking that through getting what's called an authority to operate for the customer or doing the work so that they can issue an ATO. All right, before the ATO authority to operate, give me just a sample benchmark. It could be anecdotal, it could be real numbers. Five years ago, old way, or 10 years ago, five years ago, whatever the day is, old way, new way. Months, days, years, minutes, seconds, hours. Are there different use cases? Is there a general pattern of time scale that you could share? How much savings is there to be in there? There's huge savings to the customer who are picking a highly compliant cloud environment like Amazon and then building an enclave of agency specific controls on top of that and then ingesting workloads into those agency controls. Because at the end of the day, the issue is here's a new workload moving into the cloud. How long does it take to get that ATO? And so the best practice we're seeing at VA at NASA, at a number of other agencies is to build that enclave, take as long as is necessary, and then moving workloads in is relatively trivial. In the old days I've heard people having ATO parties, hey, we got to operate, hey, in the months, now it's routine. Or not, so maybe getting there, is that? It's easier and it's for agencies that are going through this process of picking the right cloud provider for their needs, building an enclave, and then ingesting workloads, they're seeing efficiencies there. Final question, what's the challenges that the federal has right now with cloud? Just keeping up demand, what's the top critical challenge and that presents an opportunity for them that they have to hurdle through next? Yeah, that's a great question because there's a lot of things going on and different agencies are at different maturity levels. I had a chance to talk with a CIO yesterday, which whose very interesting view was one of the major blockers that he needs to work through is actually on the communications and the interface with the internet and getting that as streamlined as the internal processes around the internal ATO controls. So it depends on the agencies that have different issues based on what they're trying to do or their scope? Exactly, I mean, an internal control system is going to be very different than a publicly facing website in terms of control issues, certainly. Any multi-cloud come up with the customers or they don't really care? Is it just, you know? It has. Our most recent award with the VA, which was a large five-year, roughly $500 million ceiling commitment on the VA's part to actually make cloud first happen within the agency with all of those benefits. Their requirement was to deliver two ATO'ed hyperscale clouds on the same contract and we were able to do that successfully. Awesome, congratulations. Well, thank you. So take a minute to explain four points what you guys are doing, where you're succeeding, obviously a lot of cloud provisioning, where you guys going, sounds like you got a great safety net for customers on some critical operations if they need escalation support, certainly getting provisioned as key. What's your main business now? How you guys see the outlook for the next year? Right, thanks. Four points really has built ourselves into I think a pretty significant cloud provider to the federal government. We found a niche that works for us, which is built around provisioning and growing that as needed with either third-party services or internal support capabilities. And very much focused on either helping the customer educate themselves through training on best practices, sometimes retraining data center personnel, traditional data center personnel in cloud, working with integrators who are already very knowledgeable about agency missions. And I think nothing lasts forever, but I think that model is gonna stand us in good stead for at least another year. 10, maybe 10, it's looking pretty good. It's always gonna be more abstractionally, there's more opportunities to automate, but I think, again, the service delivery model is changing year on the wave. It is, and I think as we get smarter and as tools evolve, I think providing more automation for the customer and internally is gonna be a big part of that. And your relationship with Amazon Web Services, what's that relationship with these guys? It's outstanding. We were an early adopter with Amazon with a slightly different model in that we're not primarily a services company, we're a provisioning company, whether it's physical or logical in the cloud. And they've adapted to us and I think we've seen a lot of mutual benefit. We work a lot of programs together. Joe Lipkin, thanks for coming on and sharing your insight with me today. Appreciate it. This is theCUBE conversation here at AWS, Amazon Web Services, Public Sector, headquarters in Arlington, Virginia, right outside Washington DC, theCUBE on the ground all week. I'm John Furrier, thanks for watching.