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Obama’s $79 Billion Tech Plan May Favor Web Programs (Update1)
Mar 12th
March 11 (Bloomberg) — Vivek Kundra, the Obama official with $79 billion to spend on technology, said the government can be more efficient by putting programs on the Web, paving the way for companies like Microsoft Corp. and Google Inc. to win business.
The government wants to put data such as health-care pricing information on Internet-based systems as they grow more secure, the U.S. chief information officer said in an interview this week. The U.S. can cut costs by outsourcing that work, said Kundra, who has overseen the federal technology budget since President Barack Obama appointed him last year.
Microsoft, Google and Amazon.com Inc. are all offering more databases and programs online, allowing customers to curb storage costs. Sharing software and data that way would shrink U.S. storage needs, helping to cut expenses after previous governments spent more than $500 billion on data centers and other technology initiatives in the past decade, Kundra said.
“It’s mind-boggling,” said Kundra, a New Delhi native who previously managed information technology for the District of Columbia. “It costs a fortune, it’s duplicative and it’s an energy hog.”
The model Kundra is looking at is known as cloud computing, where users go through the Web to access computers, applications and data instead of through their own servers. He declined to say which companies are best fit to operate government clouds. He noted that Google and Redmond, Washington-based Microsoft have introduced government-focused clouds in the past few months.
‘Darwinian Pressure’
“Let the free markets decide which company is best,” he said. “We want lots of companies with lots of great ideas competing with a Darwinian pressure.”
Global spending on cloud computing may top $44 billion in 2013, according to research firm IDC in Framingham, Massachusetts.
‘“We are excited to see the U.S. federal government embrace the cloud and expect it will further boost confidence among businesses of all sizes to do the same,” Ron Markezich, vice president of Microsoft Online, said in an e-mailed statement.
Cloud computing can give the government “dramatically reduced costs,” said David Mihalchik, who heads federal business development for Mountain View, California-based Google. “All of these things help government employees to collaborate together, be more productive, and the government saves money,” Mihalchik said.
Government Work
Kundra, 35, traveled last week to the West Coast, where he met with companies such as Google and Apple Inc. in California, as well as Microsoft and Amazon.com in Washington, on a 48-hour tour of technology businesses. He said he was impressed by how they created online platforms that allowed third-party software developers to collaborate.
Last year, Kundra created Data.gov, which lets federal agencies post information for the public online and now supports more than 169,000 databases. Other projects, such as those that deal with public safety or health care, also could be put on a cloud, creating a way to share ideas and data at lower costs, he said.
Companies including Microsoft, Google and Seattle-based Amazon.com are seeking federal security certification so they can compete for work within the federal government, he said.
When he managed D.C.’s technology, Kundra moved more than 35,000 municipal employees to Google Enterprise Apps, which provides e-mail, spreadsheet and word-processing programs via the Internet. He said he’s willing to move federal employees to a similar program, if security is proven.
“As long as these companies address security, we’re going to be shifting our resources toward cloud computing,” Kundra said. The government would still own and operate some of its own secure cloud-computing systems. Full Source
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‘Cloud Computing’: What Exactly Is It, Anyway?
Feb 8th
For a lot of small-business owners, “cloud computing” is the latest IT buzzword to leave them scratching their heads. To demystify things, here’s a primer for companies looking to wade into cloud services for the first time.
What are cloud services?
The Journal Report
See the complete Small Business report .
Broadly speaking, any service or program sent over an Internet connection can be considered a cloud service. An outside vendor runs the servers and software, so the buyer doesn’t have to worry about the technical issues in-house—and can focus on its own business.
The services come in a number of forms. Many businesses are already familiar with one aspect of cloud computing: software delivered over the Web. Along with email services like Google Inc.’s Gmail, there are programs that help salespeople keep track of customer information, such as Salesforce.com Inc.’s software, and backup data-storage services from providers such as Amazon.com Inc.
Some businesses don’t just use software services, they buy computing power from vendors such as Verizon Communications Inc.—much like buying power from a utility. Let’s say a retailer expects lots of additional business during the holidays, and its in-house servers can’t handle the load of customer orders. The company might pay a vendor for the use of its servers, to shoulder part of the computing work as the need arises.
Other companies, meanwhile, might buy computing power on a regular basis. They might drop one or more in-house servers entirely—or not buy the hardware in the first place—and let a vendor run their vital programs on its machines. Once again, the buyer would pay a fee based on how much computing power it used.
How much will they cost?
Unlike traditional applications, which require hardware such as servers and IT staff for maintenance, cloud services don’t carry many upfront costs.
A Cloudy Outlook
- About 3.2% of U.S. small businesses, or about 230,000 businesses, use cloud services.
- Another 3.6%, or 260,000, plan to add cloud services in the next 12 months.
- Small-business spending on cloud services will increase by 36.2% in 2010 over a year ago, to $2.4 billion from $1.7 billion.
Source: IDC
Consider software. Salesforce.com’s offering for businesses costs between $5 and $25 per user each month. Google offers a host of programs including email, a word processor, video and a hosted Web site for an annual fee of $50 per user. For small businesses that have more-extensive computing needs, such as drug laboratories with extensive software, cloud services could cost more than $1,000 a month.
As for buying computing power, some providers charge for a certain amount of memory and computing configuration. Terremark Worldwide Inc., for example, charges six cents an hour for one gigabyte of RAM and the equivalent of one processor.
One caveat that might bump up costs a bit: If you’re going to rely on the Internet for your services, you will need a solid connection. While some believe a business-class DSL connection is sufficient, many industry observers and consultants recommend getting a faster line, such as a T1.
Continue Reading at WSJ
