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Cloud computing presents big savings opportunities

Mar. 3, 2013 - 01:14PM   |  
By AILEEN BLACK   |   Comments

With some kind of major budget cutting around the corner, no matter what happens with sequestration, government organizations need to lower their information technology costs. One option that works: Leverage cloud technology. And don’t stop with “routine” IT processes — the impressive savings come when you leverage cloud to truly support your mission.

The government’s Cloud First strategy requires agencies to evaluate secure cloud computing options before making new investments in IT. The strategy identified $20 billion in potential savings from cloud computing; this represents 25 percent of the total IT budget. For agencies to tap into this cost savings opportunity, they must leverage the cloud for mission efficiency and IT efficiency.

The government’s 2009-2010 inventory of its data centers identified more than 3,000 data centers, providing a great opportunity for cost savings and increased efficiency by moving to the cloud. A recent Deltek report estimates that the average use of federal servers is 24 percent — the target is 60 to 80 percent. This means the average federal server operates at only 24 percent of capacity.

Imagine if an employee worked only 24 percent of the time. If you did not look at how to improve that employee’s productivity, you might unnecessarily hire two to three more employees to fill the gap. You might also forgo projects because you think you don’t have manpower to complete them.

When you translate this scenario to IT infrastructure, it’s easy to see room for savings. As IT infrastructure and operations account for 60 percent to 75 percent of an organization’s IT spend, closing that gap is crucial to lowering the cost of government.

Organizations that reduce costs and increase IT resource use have demonstrated three ways to tap into the full cost savings opportunity of the cloud through the delivery of mission efficiency:

• Build a strong foundation through Infrastructure as a Service. By consolidating IT infrastructure through virtualization, among other things, agencies can pool underused resources and create efficient, resilient IT infrastructure. Cost savings are real, because when you consolidate underused servers into a common pool of resources, agencies are in a better position to extend the life and capabilities of existing infrastructure and make smarter future purchases.

• Pay for the software applications you actually use, and make them broadly available on multiple devices via Software as a Service. In this model, cloud providers install and operate application software in the cloud, and users access the software from the cloud clients. This eliminates the need to install and run the application on the user’s own computers, and significantly increases scalability. Price is also adjustable based on the number of users. This is valuable when a lot of users want to access the same application.

Across government, there are many common applications, such as email, collaboration, content management, project management, human resources, finance, grants and procurement. This presents a significant consolidation opportunity, as SaaS is the most efficient model available for the adoption of such applications. Leveraging the SaaS model for these applications has another significant advantage — it will make them more accessible to an increasingly mobile or field-based workforce. This saves money and enhances productivity, motivation and flexibility.

• Use the cloud to make software development easier, faster and more cost-effective. Most application development in the government happens outside of the IT department. As agile development methodologies have entered the mainstream, combining them with the Platform as a Service technologies will result in another level of cost savings. Modern PaaS environments, where applications can be deployed without requiring users to purchase and maintain additional hardware and software, reside upon the IaaS infrastructure model. By combining these approaches, agencies can reduce software development times and costs.

PaaS environments also enable applications to take advantage of the cloud’s flexibility and agility. And some PaaS environments feature tools that allow for the rapid development of mobile applications, which could accelerate the migration of core government services to support a mobile workforce and empower citizens to interact with their government in the same way they do with their insurance companies and banks.

A recent MeriTalk report on migrating mission-critical applications to the cloud reveals that the government could save approximately $16.6 billion annually if all agencies move just three mission-critical applications to the cloud. Of those that have moved a mission-critical application to the cloud, 91 percent report success.

One of the biggest challenges the study found was security. Predictably, 73 percent of IT managers and systems integrators surveyed said security concerns are a primary barrier to virtualization. As a result, most favor private clouds, where the agency owns the cloud and all the information residing there. Despite the challenges that come with virtualization, the study found that the government clearly recognizes the benefits that moving to the cloud would bring in cost savings, efficiency, availability and agility: Federal IT executives say they expect 26 percent of their mission-critical applications to live in the cloud in two years and 44 percent in five years.

Virtualization solutions, which provide the foundation for a smoother transition to cloud solutions, are currently run by all 15 executive branch agencies, including all Defense Department agencies, services and joint commands, and throughout both the legislative and judicial branches. However, recent reports estimate that only one-third of federal servers are virtualized, leaving enormous opportunity to realize savings.

Virtualization is defined as the creation of a virtual (rather than actual) version of something, such as a server, storage device or operating system. Virtualization addresses IT’s most pressing challenge — the infrastructure sprawl that compels IT departments to channel 70 percent of their budget into maintenance, leaving scant resources for business-building innovation. Virtualization helps reduce capital expenses through server consolidation, leaving more budget room for business-building innovation.

Tapping into the significant advantages of the cloud will also increase mobile workforce capabilities, reduce energy costs and consumption, increase agility and, most importantly, allow agencies to more effectively and efficiently meet their missions.

Aileen Black is vice president of the Public sector for VMware of Palo Alto, Calif., a provider of virtualization and cloud infrastructure solutions.

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