Government Technologist: States As Cloud Service Providers

Some state CIOs are evaluating cloud computing as the way to provide IT services to state agencies and other groups of users, including local governments and schools. It makes sense for states to go this route, but there's a right way and a wrong way.

CIOs in Michigan, Utah, and other states are mulling strategies that would essentially make their IT departments cloud service providers to public agencies. A handful of IT vendors--Amazon, IBM, Microsoft, and Rackspace among them--are aiming for that same market. The question is whether state IT departments can outperform IT vendors in the cloud. If the choice is Amazon Web Services versus Michigan Web Services, who wins?

The states have one big thing working in their favor--expertise in the idiosyncrasies (rules, regulations, privacy issues) of managing public data. Utah CIO Stephen Fletcher told Government Technology, "We're in contact with six or eight cities that are saying, 'Yeah, we'd love to have you take over our operations.' They understand that we know how to protect the information, and we know how to handle it."

So the question becomes, Can commercial IT cloud service providers like Amazon develop the know-how and IT services to satisfy the special needs of state and local agencies? I think they can and will. In fact, it's already happening. Google tailored its processes to meet Los Angeles' requirements in securing a contract to provide Gmail to 30,000 city employees. Among the extra security steps that Google is taking: Fingerprinting employees involved in the project, encrypting data in transit, and storing LA's data within the United States.

In September, Google disclosed plans to develop a "government cloud" that, among other things, complies with the Federal Information Security Management Act (FISMA). As I have written before, you can be sure that Amazon, IBM, Microsoft, and Salesforce will develop their own government clouds.

The big question for state CIOs is whether their IT organizations can manage cloud computing environments with the same skill and efficiency as IT vendors that specialize in this stuff. Behind cloud computing's faade of simplicity are servers, storage, networking, virtualization, middleware, management tools, and all the other software and gear needed to deliver applications and IT as a service. State IT departments will be hard-pressed to outperform Amazon, Google, and other big cloud service providers in data center operations. (Federal CIO Vivek Kundra is steering federal agencies away from the infrastructure business. See, "Vivek Kundra's Data Center Problem.")

Utah CIO Fletcher may have the answer. According to Government Technology, Fletcher's cloud computing strategy is factored into an ongoing data center consolidation project, and Fletcher plans to augment the state's own cloud services with those from commercial cloud vendors. This seems like a reasonable approach--deliver cloud services as part of a broader effort to make state IT more efficient and tap into commercial services where it makes sense.

A more aggressive tack is one in which a state builds out its IT infrastructure in order to add computing and storage capacity from which to offer cloud services. It's here that state CIOs, governors, and tax payers must ask themselves whether that's really the kind of long-term investment they want to make. Again, not optimal if you buy into the Kundra philosophy.

Technology leaders and politicians in a number of states--including Massachusetts, Michigan, and Washington--are taking on, or contemplating, data center construction projects for a variety of reasons. This week, Washington governor Chris Gregoire announced measures to streamline state operations. Washington is moving to a shared IT services model as part of its realignment of state agencies and services. Amid the belt tightening, however, the state is forging ahead with a controversial $300 million project to build a new data center.

I'm not suggesting that states should never build data centers; capital investments are sometimes required to gain IT efficiencies, new capabilities, and other business advantages. But if your state is thinking about breaking ground on a data center as part of its cloud strategy, it may be a sign that you're moving too fast into an emerging market--one where IT vendors are willing to take on the costs and the risks.

John Foley is editor of InformationWeek Government. Follow me on Twitter at @jfoley09 and let me know what you think about cloud computing at [email protected].

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