Expect To Save Millions In The Cloud? Prove It - InformationWeek

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John Foley
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Expect To Save Millions In The Cloud? Prove It

Top government IT officials will discuss their plans to implement cloud computing and save money at the GovCloud 2012 conference in Washington.

IW500: 15 Top Government Tech Innovators
IW500: 15 Top Government Tech Innovators
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The General Services Administration, in justifying its decision two years ago to adopt Google's cloud services for email and collaboration, projected it would save $15 million over five years. Now, an internal audit has found that evidence of those anticipated savings is lacking.

GSA's inspector general recently released the results of its audit of the agency's transition from Lotus Notes to Google Apps for 17,000 employees. Unisys is the lead contractor on that part of the project. In a related move, GSA awarded a five-year contract to Salesforce.com to use its Force.com service to support the Notes migration.

GSA's undertaking is significant because it's one of Uncle Sam's first big steps into the cloud. The agency became the first "to move its entire staff to a single cloud-based email system," according to the inspector general.

The audit, conducted from May to August, reached three findings: Some of GSA's projected cost savings couldn't be verified. Performance measures were unclear or otherwise lacking. And GSA hadn't done an inventory of the applications being moved to the cloud. As a result, the inspector general was "unable to verify whether adequate progress is being made toward the projected savings goals."

[ As government agencies embrace the cloud, who is winning the business? Read Amazon's Share Of Government Cloud Computing 'Accelerating'. ]

We saw this coming. In April 2010, a month before the GSA made its decision to move email to the cloud, I wrote a column titled, "Claims Of Government Cloud Savings Don't Add Up". The premise was that, despite a general perception that the cloud is cheaper than traditional IT, the evidence was "fuzzy." GSA's inspector general has reached the same conclusion.

The GSA, in its defense, issued a statement reiterating that it has saved $2.9 million to date on the Google cloud migration, including $1.8 million in software licensing and almost $1 million more on hardware, services, and support. "We stand by our early estimate to save at least $15 million over five years," the GSA said.

Going forward, the GSA promises to do a better job of tracking the performance of its cloud initiative. The inspector general recommended that the agency provide an updated cost-savings analysis and develop a comprehensive performance management program. "We agree with the findings and recommendations," GSA CIO Casey Coleman wrote in response to the report.

GSA's experience is a reminder of the importance of business planning and project management every step of the way with cloud computing. Contrary to conventional wisdom, there's no guarantee that the cloud will be cheaper than old school IT. In fact, InformationWeek Government's Federal Cloud Computing Survey, conducted last month, found that only 28% of respondents who are currently using or assessing cloud services determined that they stand to realize considerable savings. More than a third hadn't done the cost analysis.

I talked to a government technologist this week who said too many agencies are unable to do apples-to-apples cost comparisons between their physical IT assets and cloud alternatives. "I don't find a lot of people who know how much things cost," he said.

More government IT teams need to develop a business case for cloud computing. When we asked about that in our Federal Cloud Computing Survey, more cloud users and those assessing cloud services said they planned to develop a business case (49%) than had actually done it (35%). For more from the survey, see "Federal Agencies Build A Business Case For The Cloud."

What are other government agencies doing to plan and manage their cloud projects? We will explore that question at GovCloud 2012, a day-long conference in Washington, D.C., on Oct. 17 that will feature cloud implementers from across federal government. Keynote speakers will include Joe Klimavicz, CIO of the National Oceanic and Atmospheric Administration, Keith Trippie, executive director of enterprise system development for Homeland Security, Dave Mihelcic, CTO of the Defense Information Systems Agency, and Khawaja Shams, manager for data services with NASA's Jet Propulsion Lab.

Government IT pros involved in cloud planning and implementation should join us at GovCloud 2012. InformationWeek Government will present and discuss our Federal Cloud Computing Survey findings there, too.

It's been nearly two years since the Office of Management and Budget introduced its "cloud first" policy, and federal IT pros are still learning how to craft a cloud business case that holds up to scrutiny. GSA was forced to go back to the drawing board--others should learn from that. It's not enough to cost justify the decision to "go cloud" just at the start; performance must be tracked and validated once you make the move.

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User Rank: Apprentice
11/1/2012 | 9:29:04 PM
re: Expect To Save Millions In The Cloud? Prove It
I don't know if this assessment helps, but also for government organizations a simple tool to evaluate the most basic questions could be helpful. Of course they have independent requirements often concerning data security and availability of systems, but the assessment will give a good overview: http://www.cloudtec.ch/en/clou...
User Rank: Ninja
10/14/2012 | 1:05:19 PM
re: Expect To Save Millions In The Cloud? Prove It
Availability is an important factor as well. We use some cloud services to try them out and one fine day they out of a sudden were unavailable. Unfortunately, so was the backup plan. What happened? Big Joe with his steam shovel ripped the cables out of the ground and it took an agonizing long time to get service back. Since Big Joe did a neat job cutting fiber and traditional lines we could not fall back to a slower DSL. Now, what if we went all in with the cloud and ran business critical applications? Close the entire business for two days?
It showed that our disaster recovery was missing a big chunk. So now we mirror to a company owned data center a few states over and have almost all employees able to connect at least to shared resources and a virtual phone exchange. And we also keep only non-critical systems in the cloud. Who knows which disaster strikes on any part of the way between our office and where the cloud currently resides. Sure, the cloud itself may run fine and the vendors can switch over from a US data center to one in India or Sweden (legal issues aside), but if getting to it is a potential problem it becomes an issue. If constant availability is a must then the expenses for the plan B negate any savings from the cloud, both in cost and maintenance effort.
Another important factor is trust. Can we blindly trust the cloud vendor we chose? Are they really prepared to run our piece of the cloud 24x7x365? And are they trustworthy to handle our data properly? Someone sniffing around in it and stealing confidential info isn't even the top concern (encryption and adherence to policy can fix that), but what if Iwan the IT guy at the cloud vendor does a lousy job and our data gets lost or corrupted? Well, for that case we pull local backups which we hope to never have to use. While we have the data we still need the vendor to put it back where it belongs.
And then there is also cost. Yes, cloud potentially saves money, but some of the expenses are just shifted to a different place. Dragging data over local networks is fairly cheap and fast compared to pulling everything through external networks. We noticed a consistently higher data volume on our outside lines when people started using cloud services. That was not a surprise and we prepared for it, but there came the point were we had to upgrade the pipe increasing cost.
Time will tell if we really end up ahead compared to in-house solutions and it looks as if we do, but for a good part we just exchanged one set of problems with a different set of problems. And they are as annoying and frustrating at times to deal with as before.
User Rank: Apprentice
10/13/2012 | 1:45:19 PM
re: Expect To Save Millions In The Cloud? Prove It
Cost is one important factor. So is speed and adaptability. If my infrastructure team needs 12 months to put in place the infrastructure for a new initiative, and the Software As A Service Provider can turn it on in one month, that's a plus for the cloud. Additionally, if I build big infrastructure on one document management platform (to use an arbitrary example), and I want to change, I have to deal with staff skills obsolescence, resistance to change, retraining. If I don't have to support every bit and byte of the platform, I have a leaner base of skilled workers to retrain at the conceptual and use level.
All this means adaptability, flexibility, scalability. Those are the reasons I want the cloud. I would pay 10% more to have those things. If I can get it for less, that's gravy.
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