By Scott Fulton, Chief Product and Technology Officer, BlueCat
Cloud adoption is expanding, and AI is beginning to change how applications behave and how much traffic they generate. Cybersecurity teams are dealing with a threat environment that keeps getting more complex. Citizens, meanwhile, still expect public services to be available whenever they need them.
That pressure is reaching the network in a more visible way. This summer, Cisco told lawmakers that AI-driven applications and agents will place significantly more demand on network infrastructure, raising questions about whether current systems are ready for what is coming. For federal, state, and local agencies, the same issue is becoming harder to ignore. Modernization increasingly depends on infrastructure that was never designed for this pace of change.
The network foundation is carrying more of the load
For years, modernization was often approached one system or application at a time. A workload moved to the cloud, a legacy application was replaced, or a new security control was added. Today, those changes are much more interconnected. Federal cloud spending reached a record $16.5 billion in 2024 and is projected to exceed $30 billion by 2028. Agency networks now must support a much wider mix of activity. Citizen-facing services may span cloud and on-premises environments; employees connect from offices and remote locations, and AI-enabled applications are introducing new traffic patterns on top of both.
All those environments still rely on core network services to connect users, devices, and applications. DNS, DHCP, and IP address management, commonly known together as DDI, determine how devices connect, how applications find one another, and how IP space is assigned and tracked. They are easy to overlook because, when they work, most people never think about them. But when those services are fragmented across tools and environments, basic changes become harder. Records go stale, address conflicts appear, and cloud resources can sit outside the view of central network teams. Troubleshooting can begin with something as basic as figuring out what is actually there.
Visibility is becoming a security requirement
Security teams cannot protect what they cannot see clearly. DDI creates a useful record of activity across the network, from where systems are trying to connect to which devices are joining the environment and how IP space is assigned. When that information is split across disconnected tools, incident response slows down. Teams may have to piece together several sources before they can answer basic questions about a suspicious device or unusual request. Verizon’s 2025 Data Breach Investigations Report found that misconfiguration accounted for 22% of error-related breaches in the public sector.
A more unified view gives teams context earlier. An unexpected DNS change, unfamiliar device or unusual resolution activity becomes easier to investigate when the surrounding network data is already available. This matters even more as agencies adopt additional cloud services, where infrastructure can be created and changed quickly by different teams.
Hybrid cloud changes the operating model
Cloud adoption has added new environments without necessarily replacing the old ones. Agencies may be managing workloads across multiple cloud providers while continuing to operate on-premises systems that could remain in place for years. For state and local organizations, that growing mix often falls to relatively small IT teams. The result is a network that spans different platforms, management models, and infrastructure generations.
The practical question is whether agencies can manage those environments with consistent policies and reliable network data. For DDI, that means understanding IP space across cloud and on-premises infrastructure, applying DNS controls consistently and automating routine changes where manual processes no longer make sense. A cloud workload can be deployed in minutes. If the network changes needed to support it still requires tickets, handoffs, and manual updates, the network becomes the slow part of modernization. Configuration drift can also build quietly.
DDI belongs in the CIO conversation
DNS, DHCP, and IPAM have traditionally been treated as operational tools owned by network teams. That made sense when infrastructure changed slowly, and most systems lived in predictable locations. Hybrid environments have widened the audience. A CIO planning cloud migration needs reliable service discovery across environments. A CISO investigating an incident needs trusted network context. Similarly, operations teams need accurate information before they automate, and compliance teams need records of changes that can be produced without rebuilding the history later.
The operational stakes are significant. Uptime Institute’s 2026 outage analysis found that 57% of organizations said their most recent major outage cost more than $100,000, while one in five reported costs above $1 million. For technology leaders reviewing modernization plans, the focus should be on whether teams have an authoritative view of IP space, consistent visibility into DNS activity, and a reliable record of network changes.
Modernization must include the foundation
Government agencies cannot rebuild their networks every time the technology landscape shifts. AI will introduce new demands. Hybrid environments will expand. Security requirements will evolve while many older systems remain in service. The goal is to make the foundation easier to understand, manage, and change.
That starts lower in the stack than most modernization conversations do. DNS, DHCP, and IP address management rarely receive the attention of a new cloud platform or AI initiative. Yet every one of those projects eventually depends on the network working as expected. As agencies plan the next phase of modernization, that foundation deserves a place in the strategy.
##
ABOUT THE AUTHOR
Scott Fulton is Chief Product and Technology Officer at BlueCat and a veteran enterprise technology leader with more than 20 years of experience across cloud infrastructure, DevOps, and cybersecurity. He previously founded cloud observability startup OpsCruise, where he led the development of AI-driven technologies used by Fortune 500 organizations.
