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Posted by Nigel Fenwick on April 12, 2010
Federal CIO Vivek Kundra’s recent presentation to the Brookings Institution outlined how the US administration is moving to a “Cloud-first” approach to consolidating the US government technology infrastructure. Since the US government is the largest buyer of information technology in the world, spending over $76 billion supporting over 10,000 systems, we can be sure that a Cloud-first policy will have a major impact on technology vendors and the services they offer - not only to the US government but to all IT buyers.
The National Institute of Standards and Technology(NIST) is tasked with figuring out how to make cloud services work across diverse government organizations. In his presentation Kundra highlighted issues with the status quo: “The economic benefits of cloud computing won’t be realized if every agency independently reviews and certifies solutions. The current fragmented certification process – where agencies independently conduct Certifications and Accreditations on the same products – is redundant, and adds both time and cost to an already complex procurement process.” The plan to break the status quo is for NIST to provide centralized certification of Cloud services - all federal agencies can then source from certified Cloud services. Essentially NIST looks to become the clearing house of Cloud services approved for federal use. The good news for vendors is that this will significantly reduce the procurement cycle and cost of supply to the US federal government. Once the certification backlog is cleared it’s also likely to result in a significant increase in the volume of federal IT services deployed on the Cloud.
Looking to the future Kundra suggested “Cloud Computing will give rise to virtual organizations. Unencumbered by the physical constraints of data centers, hosting providers and hardware platforms, these virtual organizations can focus solely on customer needs.”
There is perhaps a lesson here for all CIO’s, and one which is supported by research from Forrester (see below): CIOs should get out of the technology utility business and move into the business of helping their organizations support customer needs. Cloud Computing may be just another technology delivery platform to some people, but to others, like Kundra, Cloud Computing opens the doorway into a new era of IT.
And the vendors are going to have to evolve faster to remain competitive. “Vendors will face relentless Darwinian pressure to evolve and improve their products and services in the interest of their customers.” As new vendors come on-stream and the costs of switching from one vendor to another drop, only the fittest will survive. Even without the government backing we can expect to see significant expansion and subsequent consolidation in the Cloud Computing market over the next ten years. It remains to be seen if this new federal push will favor the big Cloud players over new startups. Tech vendors without a cloud strategy will need to move fast to avoid going extinct.
One thing is clear, Cloud is good for entrepreneurs. It’s unlikely that any new firm starting out today would create a traditional internal IT department. Why would they when they can tap into unlimited power through the Cloud. As Kundra put it “using the power of the cloud, an entrepreneur with a good idea no longer needs to own a data center to launch a business that serves millions of customers.”
Fortunately CIO’s across the world are coming to view Cloud as an opportunity to focus their resources and skills on what matters most to the organization – the customer. Certainly that’s how Kundra sees it “Federal IT is going to go through a massive transformation, freeing CIOs across the government to focus on serving the American people.”
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