Government customers key to cloud's commercial future

A Qwest Communications Inc. data center — opened Feb. 15 in anticipation of an increased demand for hosting and cloud computing infrastructure services — already has a federal customer.

Having that customer gives Qwest a marketing chip in the private sector, which lags the federal government in adopting cloud computing, said Ted Ritter, senior research analyst at IT consulting firm Nemertes Research Group Inc. Although cloud has enjoyed a huge hype, “on the commercial side, only a few percent of companies are doing cloud computing in a production environment,” he said.

“What’s holding back adoption of cloud on the commercial side are concerns with security and compliance,” Ritter added.

Although companies such as Amazon and Google have established a presence in providing software as a service, service providers that provide infrastructure-based cloud services have an edge, Ritter said. Reasonably enough, organizations want to assure themselves that their data is secure and want to do their own security audits, which is not feasible in a data center hosting multiple customers, public or private.

“The fact that Qwest has that federal customer means that it has been audited, it’s received its certification and accreditation from government” as a prerequisite for the agency becoming a customer, Ritter said.

The edge that having a federal customer may give a cloud service provider could well increase as the private sector learns more about federal security processes, he said. Cloud definitions have not coalesced into standards in the private sector.

“Feds are leading the charge in defining what it is,” Ritter said. “I think [the National Institute of Standards and Technology] has the most complete and rational explanation of what it is and what it’s supposed to do.”

A recent survey of federal IT personnel showed that the security of data in the cloud was the overwhelming concern of 69 percent of respondents, said IT research firm Input Inc. Despite such concerns, nearly a quarter of those surveyed were already using a cloud solution of some kind, said Input senior federal analyst Alex Rossino.

With its migration to Global Computer Enterprises’ financial management shared service provider system, the Labor Department recently became “first cabinet-level department to move a major internal operation onto a cloud platform,” Rossino said.

In its recent report "Emerging Technology Markets in the U.S. Federal Government, 2009-2014," Input forecast that the adoption of cloud computing across the federal government will surge over the next five years to become a $1.2 billion market.

The groundwork has been laid with cloud’s underlying technology: virtualization, Nemertes’ Ritter said. Typically, the first move toward cloud is IT infrastructure consolidation and virtualization, and shrinking budgets accelerate the move. “Cloud lets organizations change the color of the money they spend on IT,” he said. “It lets them write it off as an operational expense rather than as a capital expense.” With infrastructure-based services, responsibility for building out and maintaining the infrastructure shifts to the data center owner.

Qwest’s new CyberCenter is its third in the Washington area, its 17th nationwide. Because the company bought an existing data center, it was able to quickly equip the 129,000-square-foot facility’s redundant state-of-the-art network and hosting capabilities, said Qwest Government Services spokesman Tom McMahon. The business unit holds Universal and Enterprise contracts under the General Services Administration’s Networx telecommunication services contract.

Key features of Qwest’s new CyberCenter include:

• Server and database management.
• On-site and centralized operations.
• Physical security.
• Redundant power for critical systems.
• Managed network availability and performance service level agreements.

Similarly, other Networx contract-holders also are pursuing cloud-based dollars. For example, Verizon Federal Business has Computing as a Service. CaaS lets agencies use a Web-based portal to access computing resources “in the quantities and duration dictated by their business needs,” Verizon said.

And through its Synaptic HostingSM and Synaptic Storage as a ServiceSM, AT&T offers on-demand computing and storage. “It lets agencies quickly tailor the service that they need to the requirements that they have,” said Jeff Mohan, executive director of AT&T Government Solutions’ Networx program office. “For example, an agency may release a report that everybody looks at every Thursday morning. So on Wednesday night, they have to compile and collate the report from a lot of different sources and they need a bunch of computers to do that. They can subscribe to Synaptic Hosting on Wednesday night, accomplish that computing and then unsubscribe to it on Thursday morning.”

With Obama’s flattened IT budget for 2011 calling for, among other measures, a reduction in the number of data centers, and, according to Input, 70 percent of budgeted funds spent on simply maintaining infrastructure, government’s future in the cloud may be — for good or ill — inevitable.