Feds Now Need to Explain Lack of Cloud Plans
The federal government isn't exactly flush with cash, and the Office of Management and Budget Management—the White House's spending watchdog—sees the cloud as a means for cutting down on the more than $60 billion Washington spends on IT systems and support each year. According to various published reports, the OMB will mandate in the fiscal year 2011 (which starts in October 2010) that federal agencies not using cloud computing or making cloud computing part of new IT projects explain why. By fiscal year 2013, the policy will require agencies to provide details and road maps on their plans for adopting cloud-based technologies. This isn't an empty threat or hollow paperwork requirement. Federal agencies that fail to comply risk having their IT funding stalled or withdrawn. Now, how big of a stick this policy will have is questionable. The OMB is calling for greater cloud adoption in 2010, and competing budget allocations in the House and Senate have just $35 million set aside for cloud initiatives - that doesn't even constitute a drop in the vast federal IT budget. However, some agency directors and IT decision-makers are saying the policy change is significant, since cloud computing is being used by name for the first time, which will cause planners to rethink their spending options. For solution providers servicing the federal government, the OMB's policy change could mean new opportunities in consulting and advising on cloud computing planning and implementations. The presumption is that most of the federal spend for hosting and delivering cloud services will go to large integrators and government contractors. But the federal government does require a significant amount of its money to go to small businesses, and that could open new sales opportunities for small, regional solution providers. |
Comments (4)
The OMB should take a history lesson and realize that all new trends introduced by software and hardware vendors are designed to increase, not decrease, their revenue. If anything from outsourcing experience has been learned, there are often suprising cost over runs when you replace a fixed cost asset with a variable one. Don't be so quick to to say that Cloud Computing will save money.
Posted by Derek Stevens | December 11, 2009 4:18 PM
Nice wag of your finger, Derek. Exactly what is that you do, to make the Government spend LESS?
Posted by Dick B | December 12, 2009 2:06 AM
Technology is never to blame for overruns, ineptitude is.
My company provides web-based (cloud) technology that services local government around areas such as licensing, permitting, inspections and code enforcement. Our competitors have to hire staff to run their hosted solution or install computers. We run all of our technology on a platform (Force.com) and we have no capital expense if we want to add an additional 100 users or 1000 users. This is a massive cost and competitive advantage for us and we can pass that on to government. We constantly beat competitors that try to gouge.
Just my opinion.
Michael
Posted by Michael Togyi | February 1, 2010 6:12 PM
Great Read:
"The typical cost discussion regarding internal data center versus cloud provider costs is over-simplified and fails to assign a true cost structure to the internal data center side. This isn't really surprising: Most IT organizations really don't have a clear understanding of their true costs in the first place."
You don't have to spend much time around cloud computing before you run into arguments regarding cloud economics and you will undoubtedly encounter the phrase "Capex vs. Opex." This refers to the fact that stocking your own data center requires capital expenditure, while using an external cloud service that offers pay-as-you-go service falls into ongoing operating expenditures: thus the contrast of "Capex vs. Opex." The next go-round of the argument then devolves into a tussle about which alternative is cheaper.....
http://www.cio.com/article/484429/Capex_vs._Opex_Most_People_Miss_the_Point_About_Cloud_Economics
Posted by Deborah Johnson | March 20, 2010 12:04 PM