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Getting Out of the Server Business and Into the Service Business: Talking Cloud With Jeff Kaplan

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Listen to my podcast with Jeff Kaplan, the Founder and Managing Director of ThinkStrategies. In this podcast we discuss government's use of the cloud and the far-reaching impact it will have on businesses in the future.

Listen to or download the 8:35 minute podcast below:

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PS: Now, people often think that the government is generally behind the times in terms of technology. Would you say this is also true in terms of cloud computing?

JK: Not at all. In fact, the Obama Administration as well as other segments of the public sector are recognizing that cloud computing may in fact be a timely solution to meet the escalating budgetary challenges that they're facing in this tough economic environment.

PS: What are some of the key government initiatives that industries should pay attention to?

JK: Well, at the federal level, the CIO for the Obama Administration comes out of the technology industry and he announced early on that he's a big proponent of both software-as-a-service as well as the brother cloud computer phenomenon. And he's been working with government agencies as well as the leaders within the cloud computing sector to drive cloud computing alternatives into the federal policymaking process.

So that includes most recently a directive by the Office of Management and Budget to put a freeze on about $3 billion worth of spending that was planned for this year on new financial management systems to help control government spending at the federal level. What they want to do is evaluate those projects to determine whether or not they might be more effectively deployed on a cloud infrastructure and be a software-as-a-service solution model.

In addition, about a year or so ago, the federal government launched its own apps marketplace called Apps.gov and it's a terrific sight not only for government agencies but even for private institutions to take a look at. Because in addition to having an assortment of online software-as-a-service solutions available to be procured from the site itself, it also is a terrific resource center for industry best practices and even definitions of what is SaaS and cloud computing including the National Institute of Standards and Technologies definition of cloud computing which is a working whitepaper which they provide in a Word format which is terrific.

Then also, just to make the point even more dramatically, when we think about the cloud, you tend to think of the government being a laggard when it comes to technology. Of course, we know that NASA and other segments of the federal government have actually been in the lead in terms of developing new technologies. Well, so is the Department of Defense and it has been a big proponent of SaaSifying, if you will, some of their government processes.

They have recently been deploying at a customer relationship management system provided by a company called RightNow to improve the responsiveness of the agency, not only to their own employees' requirements but to third party contractors and U.S. citizens as well. So we're seeing a lot of things happening at the federal level.

PS: Interesting. Now, you say federal level but not everything in terms of cloud and government is happening at the federal level, right?

JK: Well, you're right about that. In fact, it's permeating almost every level of the public sector. One of the more notorious diversions to a SaaS alternative or cloud based alternative is the decision by the City of LA to convert its e-mail system from a legacy platform to Google Apps.

And it actually worked in conjunction with Computer Sciences Corporation or CSC to deploy that across all of the city agencies to support over 34,000 employees and they expect significant cost savings from that initiative. And they've also put in place some pretty strict policies and procedures regarding security and compliance to ensure that it meets their government requirements as well.

I had the privilege of attending a conference last month where the CIO of Orlando, Florida, a fellow by the name of Conrad Cross, I thought put it best. He said for a guy like me in a tough situation where every year I'm being asked to reduce our operating budget by 10, 15, maybe even 20%, I need to get out of the server business and get into the services business. And that's becoming the battle cry of a lot of IT decision makers at all levels of governments.

PS: That's a great way to put it. Now, what would you say the long term implications of these government initiatives?

JK: Well first of all, it demonstrates that software-as-a-service and cloud computing can be applied to any sector of the marketplace whether it's the public sector or various vertical industries, and can be used in a variety of ways to meet day-to-day e-mail requirements or more sophisticated operational needs for expansive agencies like the Department of Defense. And that it can meet the fact that security and compliance requirements of the most stringent operating environments as well.

And what it's also demonstrating is the scalability of these services as well as the economic value that they bring. And all of this of course contributes to a momentum that will help to encourage the evolution of the marketplace, hopefully, to greater maturity of the services that the SaaS and cloud vendors are offering the market as we go into the future.

PS: Excellent. Now, the government as well as many private enterprises have had some caution with the cloud because it's been said that risk amplifying some current problems. How would you say would be the best way to prevent this from happening?

JK: Well that's a great point. When you move to a services business like Conrad Cross over at Orlando put it, you are putting a lot of trust into the service provider to supply you with not only the functionality you expect but more importantly, the reliability and security that you require. And therefore, it puts a greater burden ever before on the IT and business decision makers within those organizations to thoroughly investigate as well as evaluate the service delivery capabilities of those providers and put in place solid service level agreements with teeth that have the ability to govern that business relationship and service capabilities to ensure that they mitigate the potential risks involved in moving down this path.

That risk of course is even compounded by the fact that we've seen a proliferation of players many of whom who are simply rebranding their traditional capabilities to try to capitalize on this rapidly evolving marketplace. So rather than this business disintermediating the IT manager or even the CIO, in fact, puts even greater responsibilities on them to select the right vendors and properly manage those vendor relationships on an ongoing basis.

ebizQ’s expert blog team covers a broad range of BPM, business integration, business analytics/monitoring, collaboration, content and related issues.

Peter Schooff

Peter Schooff is Contributing Editor at ebizQ, and manager of the ebizQ Forum. Contact him at pschooff@techtarget.com

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