The largest buyer of IT and cybersecurity solutions in the world is not a tech giant or a Fortune 50 company, but the U.S. Federal Government. In 2024, U.S. federal agencies will spend more than $80B on private IT solutions, and $9B on cloud-based solutions specifically. For vendors, this represents a huge sales opportunity and the venture capital and private equity firms that back these companies are eager to see these solutions scale within the U.S. public sector market. But the journey is not for the faint of heart. Before any solution can be purchased by a federal agency, it must achieve FedRAMP authorization. This is typically a multi-year, multi-million-dollar investment – and even then, there is not a guarantee of ROI.
It is critical for business executives and their backers to separate myth from reality when it comes to FedRAMP. Expectations are often based on assumptions and anecdotal stories and expectations of large contracts immediately following approval. In reality, it often takes several years and significant product and compliance investments before building enough traction to convert to revenue. It’s not uncommon for companies to invest $1-4M on FedRAMP authorization, and business leaders who have been through the process frequently note that the technical requirements and retooling of the product to meet government-specific needs was more involved and time-intensive than originally anticipated. But the process doesn’t need to be a headache. Rather than looking at FedRAMP as an expensive toll to pay in order to “get to the other side” where sales will come, FedRAMP should be viewed as a strategic enterprise growth investment that takes proper planning and readiness. The following identifies strategies for assuring product, compliance and market readiness, paving the way for monetizing the FedRAMP investment.
Seeing Double: Use a Digital Twin in Your FedRAMP Journey
Proving that your solution meets the compliance requirements of FedRAMP often requires multiple product iterations. Deploying a “digital twin” of the product helps to simulate how the solution would function if it were in the federal market and can help expedite the FedRAMP audit process. With this approach, the unique code is scanned as if it were in production, and any compliance gaps can be addressed early within the digital twin. This greatly streamlines the process and saves tremendous time, enabling engineering and development teams to quickly resolve any problem areas that could prevent the product from achieving FedRAMP authorization. Otherwise, each tweak to the actual product could take weeks, and communication among team members is inhibited because not everyone can access the code in the FedRAMP “bubble.” Using a digital twin is helpful for getting changes approved and integrated for the lifetime of the product as well.
Shared Enterprise Priority: FedRAMP Requires Full Company Engagement
FedRAMP must be a combined effort from the entire company – from the C-suite, board, investors, IT and compliance team to the sales department. It cannot be seen as just a compliance endeavor or a sales endeavor. All teams need to be working together to set overarching business goals and return on investment expectations. A cohesive plan must be put in place from the get-go. This plan requires data analysis on things like government programs that may require your type of solution, budget allocation for those programs, and competitive offerings that are competing in the space. The plan should also include key milestones, timelines, budgeting, and incentives for both the sales and compliance teams. Importantly, sales should not be viewed as something that starts only after FedRAMP authorization has been achieved. Instead, a full go-to-market plan must be implemented in concert with compliance efforts. The first federal sale should be everyone’s end goal. Think of the infamous anecdote of the NASA janitor telling President Kennedy that he was helping to put a man on the moon – this is the mentality the full organization needs to have around not just achieving FedRAMP authorization, but actually beginning to sell into the U.S. Federal Government.
Consider Pursuing StateRAMP
If pursuing FedRAMP still seems too daunting, consider pursuing StateRAMP authorization first. The StateRAMP process is less time-intensive and less expensive, but still provides a valuable entry into state and local government markets, allowing you to build traction before tackling FedRAMP.
The most important thing for any company pursuing FedRAMP to remember is that FedRAMP authorization is not the end goal – revenue is the goal. Too often, solution providers relegate the FedRAMP approval process to a compliance team. However, it is impossible to properly analyze return on investment and calculate revenue if you are only looking at it through the compliance lens. The go-to-market team, compliance team, C-suite and board all must be involved to make the right strategic decision for the company. Following this approach benefits the company and the U.S. Federal Government market.
The author, Josh Beard is Chief Strategy Officer at Constellation GovCloud.