Posts tagged private sector
Saving Money Through Cloud Computing – Cloud Information
Apr 7th
The U.S. federal government spends nearly $76 billion each year on information technology, and $20 billion of that is devoted to hardware, software, and file servers (Alford and Morton, 2009). Traditionally, computing services have been delivered through desktops or laptops operated by proprietary software. But new advances in cloud computing have made it possible for public and private sector agencies alike to access software, services, and data storage through remote file servers. With the number of federal data centers having skyrocketed from 493 to 1,200 over the past decade (Federal Communications Commission, 2010), it is time to more seriously consider whether money can be saved through greater reliance on cloud computing.
Cloud computing refers to services, applications, and data storage delivered online through powerful file servers. As pointed out by Jeffrey Rayport and Andrew Heyward (2009), cloud computing has the potential to produce “an explosion in creativity, diversity, and democratization predicated on creating ubiquitous access to high-powered computing resources.” By freeing users from being tied to desktop computers and specific geographic locations, clouds revolutionize the manner in which people, businesses, and governments may undertake basic computational and communication tasks (Benioff, 2009). In addition, clouds enable organizations to scale up or down to the level of needed service so that people can optimize their needed capacity. Fifty-eight percent of private sector information technology executives anticipate that “cloud computing will cause a radical shift in IT and 47 percent say they’re already using it or actively researching it” (Forrest, 2009, p. 5).
To evaluate the possible cost savings a federal agency might expect from migrating to the cloud, in this study I review past studies, undertake case studies of government agencies that have made the move, and discuss the future of cloud computing. I found that the agencies generally saw between 25 and 50 percent savings in moving to the cloud. For the federal government as a whole, this translates into billions in cost savings, depending on the scope of the transition. Many factors go into such assessments, such as the nature of the migration, a reliance on public versus private clouds, the need for privacy and security, the number of file servers before and after migration, the extent of labor savings, and file server storage utilization rates. Based on this analysis, I recommend five steps be undertaken in order to improve efficiency and operations in the public sector:
- the government needs to redirect greater resources to cloud computing in order to reap efficiencies represented by that approach,
- the General Services Administration should compile data on cloud computing applications, information storage, and cost savings in order to determine possible economies of scale generated by cloud computing,
- officials should clarify procurement rules to facilitate purchasing through measured or subscription cloud services and cloud solutions appropriate for low, medium, and high-risk applications,
- countries need to harmonize their laws on cloud computing to avoid a “Tower of Babel” and reduce current inconsistencies in regard to privacy, data storage, security processes, and personnel training, and
- lawmakers need to examine rules relating to privacy and security to make sure agencies have safeguards appropriate to their mission.
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The economics of cloud computing
Feb 25th
What will the next big technology be? This column argues that “cloud computing” will have a dramatic effect on how we live our lives and how we do business. The economic impact of the diffusion of this technology could match that of telecommunication infrastructures in the ’70s and ’80s or the introduction of the internet in the ’90s. Once diffusion gathers apace, cloud computing could significantly boost GDP growth and could create around a million EU jobs within five years.
The new big thing of the IT world is “cloud computing”, a general purpose technology that could provide a fundamental contribution to promote efficiency in the private and public sectors and promote growth, competition, and business creation.
Cloud computing is an Internet-based technology (hence “cloud”) which stores information in servers and provides it as an on-demand service. The economic impact of cloud computing will be substantial on both households and companies.
- On one side, consumers will be able to access all of their documents and data from any device (the home or work PC, the mobile phone, an internet point), as they already do for email services or social networks.
- On the other side, firms will be able to rent computing power (both hardware and software in their latest versions) and storage from a service provider, while paying on demand, as they already do for other inputs such as energy and electricity.
The former application will affect our lifestyles, but the latter will have a profound impact on the cost structure of all the industries. For instance, it can provide huge cost savings and greater efficiency in large areas of the public sector including hospitals and healthcare (especially to provide information and technologies in remote or poorer locations), education (especially for e-learning) and the activity of government agencies with periodic spikes in usage. Moreover, substantial positive externalities are expected because of energy savings: the improvement of energy efficiency may contribute to the reduction of total carbon emissions in a substantial way.
If we look at the private sector, again the introduction of cloud computing can provide cost savings. It can create multilateral network effects between businesses, and it can promote entry and innovation in all the sectors where IT costs are restrictive and are drastically reduced by the adoption of cloud computing. This last effect can have a large effect on the wider economy. Continue Reading…Full Source
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State-sponsored cloud computing could increase in 2010
Jan 6th
2010 promises to be a big year for cloud computing. According to a recent INPUT survey of the state and local landscape, the market is expected to nearly triple by 2014. But recent actions by two state governments may throw private sector providers of cloud computing a curveball. Both Utah and Michigan are developing plans to host their own clouds for use by local agencies, regional state offices and school districts.
Software-as-a-Service and Platform-as-a-Service solutions are expected to have the highest Compound Annual Growth Rate (22 percent) because they can be leveraged to address security issues, scalability and existing IT resources, according to Deniece Peterson, Industry Analysis Manager at INPUT. Everything from healthcare reform, open government initiatives, expanded Recovery Act reporting and energy legislation could be addressed with virtualization and cloud computing, she said in a recent e-mail exchange.
For a market valued at $239 million in 2009, public sector cloud providers such as Google, Salesforce.com, and Amazon are poised to grab a piece of a nearly $2 billion pie five years from now. But, Ms. Peterson says public sector cloud computing service centers, like the ones being developed in Utah and Michigan, are likely to gain in popularity.
“This practice could indeed increase for a couple of reasons. First, states creating private clouds for their local governments can control security and standardization, and the problems of interoperability and integration are manageable. Secondly, it makes the transition to cloud computing cheaper for local governments,” she said.
For Utah, cloud computing is the logical extension of a statewide consolidation initiative to combine services and hardware, like e-mail and mainframe maintenance, which has been underway since 2007. Utah CIO Steve Fletcher told Government Technology he was already in talks with over a half dozen city counterparts about using the state’s cloud.
Likewise, Michigan is hoping to reap the benefits of shared-services with the addition of a 80,000 square-foot data center. But newly appointed director of Michigan’s Department of Technology, Management and Budget Ken Theis said the state also hopes to lure technology-related economic development by creating a space for private sector companies to host and store applications. Michigan officials said the data center could cater to local startups as well as established companies, nationwide. The data center would offer low-cost hosting for smaller companies and be a competitive option for those bigger companies looking to outsource hosting operations domestically.
For the private sector though, state savings means increased competition among eachother, but also against a public sector option that could be better positioned, to offer cheaper service to other government entities within the state, Ms. Peterson said.
“If states mandate the use of state-owned clouds, this could lock vendors out of sections of the market.”
But Ms. Peterson also cautioned that states might not meet all their needs within their own clouds, creating opportunity for third party providers for infrastructure support and consulting.
She also noted that local entities may show resistance to moving their data to state-sponsored clouds, especially if its perceived as “the loss of control over IT resources and information.”
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Why the public sector is opening the doors to open source technology?
Jul 16th
With the public sector spending plans of all political parties coming under close scrutiny, IT is being labelled in equal measure as the cause and saviour of the current spending crunch that the public sector is facing.
However, it is not a simple either/or argument. It is not a case of should the country have an eGovernment strategy, but rather what that strategy should be.
The debate reached a new height this week with the Conservative Party’s announcement regarding its suggested alternative to the spiralling costs of the NHS database project. Moving on from general statements of intent, this was the one of the first acknowledgements that government technology purchasing is under the spotlight and seen to be an important part of a party’s manifesto.
The idea of moving NHS data into the ‘cloud’ through providers such as Google is a bold choice; however it mimics strategies that have been adopted across the private sector. There is no doubt that the landscape of public sector technology purchasing is changing and the adoption of open source/ open standards technology provides a more transparent, democratic approach to technology purchasing.
