When Flint Waters began work as Wyoming’s CIO in April 2011, the IT apparatus that he inherited was in bad shape.
Agencies throughout the state government were running their own email systems, underused servers had piled up in Cheyenne and around satellite offices, and rigid rules for accessing the VPN limited the options for mobile workers, nearly all of whom carried BlackBerries.
“We had siloed IT at each of the agencies. Most of the agencies ran their own Active Directories, their own email systems,” Waters recalls. “There really wasn’t an enterprise approach to collaboration at all.”
Google Apps for Government
But that was all about to change. By the time Waters arrived, Wyoming had already made the decision to convert its suite of productivity tools to Google Apps for Government. In June of that year, Wyomingfinished its transition, making it the first state in the country to complete the switchover to the cloud.
Today, the IT operation that Waters oversees has gone far beyond that modest first step into the cloud — his team is now developing applications in Google’s App Engine, shifting enterprise storage into the cloud and has dramatically reduced its server count, with the state’s core IT operations currently running on two clouds, one on-site and the other hosted remotely. In what is now a highly mobile workforce with a liberal BYOD policy, BlackBerries are all but extinct.
And all that started from an application suite that Google was marketing primarily as an email and calendaring play.
“We turned that upside down,” Waters says. “Far more significant than any of that was it created a collaborative environment.”
Cloud Computing is the Gateway for Collaboration
Wyoming may have been ahead of the curve when it began its move to the cloud two years ago, but public-sector CIOs at all levels increasingly have been adopting or at least considering cloud computing for a variety of purposes, ranging from improving productivity and collaboration in the workforce to cutting costs and improving services for citizens.
In the federal government, 94 percent of agency CIOs polled in a recent survey by TechAmerica said that they have already begun shifting operations to a public or private cloud, or that they have plans to do so.
Office applications such as email and spreadsheets can be seen as something like a gateway drug to cloud computing. The collaboration benefits of synched documents and calendars are readily apparent, and it can be a much easier sell to move those lightweight apps to the cloud in the course of the IT refresh cycle than larger, more complex legacy systems like payroll or human resources.
Most federal CIOs polled in TechAmerica’s survey said that those systems in their agencies are frozen in place due to the cost and complexity of shifting them to the cloud, not to mention the security concerns that continue to slow the cloud-computing transition across the public sector.
Google Apps for Government vs. Microsoft Office 365
In the office app space, though others are in the mix, the two vendors vying for the large majority of the government contracts are Google, with its Apps for Government suite, and Microsoft, which has been winning over converts from its venerable Office product to the cloud-based Office 365.
“It’s a two-horse race right now,” says Gartner analyst Tom Austin.
Microsoft and Google are cagey about the extent of their government businesses, declining to disclose revenue figures or a precise count of how many customers each has signed up. But both can boast of impressive wins.
At the federal level, Google counts the General Services Administration and the National Archives as customers, among others. Microsoft has rolled out Office 365 to workers at the U.S. Department of Veterans Affairs and the Environmental Protection Agency, along with numerous state and local entities.
In March, when Microsoft announced the addition of eight new public-sector cloud customers, the company boasted, “More than 1 million U.S. government workers are moving to Office 365 for their day-to-day productivity needs across a variety of federal, state and local organizations.”
Google is less specific, saying only that agencies in 44 states and the District of Columbia use the company’s Apps product. Executives with both companies interviewed for this story would not elaborate on the number of government customers they have signed up for their cloud suites.
Gartner’s Austin estimates that Microsoft wins roughly two out of three government contracts for cloud-based productivity tools, with Google taking the remaining third, with a little room at the margins for other vendors trying to compete in the space.
Government Agencies Move to the Cloud a Matter of When
To be sure, the reasons that government agencies are moving to the cloud are varied, but the shift is underway and the momentum points in one direction.
“The conversations are not about if they’re going to go to the cloud, but when,” says Curt Kolcun, vice president of Microsoft’s U.S. Public Sector division. “We’ve broadly gotten beyond that.”
“I think we’ve reached the tipping point. Government has recognized that the cloud is a better way of doing business,” says David Mihalchik, head of Google Apps for Government. “There are so many more government agencies that are looking to adopt more powerful technology at a lower cost.”
The growing awareness among government CIOs and IT managers about the agility and potential productivity gains the cloud can offer has made product suites like those Google and Microsoft offer an easier sell to public-sector agencies. At the federal level, the cloud has won the endorsement of the White House, which has been directing agencies to consider cloud computing solutions first as they embark on new IT deployments.
Important Factors Government Must Weigh When Moving to the Cloud
But even if cloud computing has graduated from its buzzword phase and is now better understood among government decision makers, there remain many important factors to weigh when considering a move to the cloud.
That starts with a sober assessment of the objectives the agency is trying to achieve, according to Mark Herman, an executive vice president with Booz Allen Hamilton in the firm’s Strategic Innovation Initiative.
“I think you have to have an outcome-based strategy. You have to say, ‘What are you trying to do?'” Herman says.
In some cases, a comparison between legacy applications and their counterparts in the cloud presents the opportunity for substantial cost savings, an especially appealing outcome at a time when agencies are dealing with contracting budgets and increasing demand for citizen services.
“The No. 1 reason why government entities are moving is cost. Cost, cost, cost,” says Gartner’s Austin. “Some of the cost issues are less than obvious.”
For instance, it’s not uncommon to hear about a department or large agency in the federal government that has multiple — in some cases a dozen or more — internal email systems, each with its own management requirements and often maintained by sub-agencies or bureaus that are reluctant to cede control of their operations to the IT shop headed by the agency CIO. (Small wonder, then, that U.S. CIO Steve VanRoekel and other government IT leaders have been asking Congress for legislation that would give department and a gency CIOs new authorities to oversee IT operations and make purchasing decisions.)
Overcoming the internal politics and turf wars and consolidating into a single email system can often yield significant savings on the maintenance and management side, while allowing IT staffers to refocus on more forward-looking projects that advance the mission of the agency.
Given the unique pressures government CIOs face, some public-sector organizations, particularly at the state and local level, have been moving to the cloud more aggressively than many segments of the business community.
“I think cost is a principal driving factor for our customers,” says Microsoft’s Kolcun. “I do believe that based on the budgetary constraints across all aspects of the public sector that they’ve been actually leading to the cloud.”
Experts caution, however, that it is not a given that the cloud-based productivity suites that Google and Microsoft will automatically translate into cost savings over the lifecycle of the deployment. When government IT buyers begin meeting with vendors to discuss a cloud migration, the process bears a similarity to shopping for a car, according to Austin.
In both cases, the customer is presented with a baseline product whose price tag increases with the addition of extra features. Cloud contracts, like auto financing, may also offer a low introductory rate for a set period of time. Another variable concerns the extent of support the vendor will provide for the migration and afterward, details that are often negotiated on a contract-by-contract basis.
Price is a centerpiece of Google’s marketing pitch for its Apps for Government suite, advertised at less than $5 per employee per month. Microsoft’s baseline pricing for Office 365 begins at $6 per user per month, though the company has plenty to say about its chief competitor in the government space, offering a one-page PDF and 10-point Word document (both available for download here) taking shots at Google Apps for Government, including a list of “hidden costs” such as help desk and IT support. Google took its own shot at Office 365 two years ago on the eve of the product’s launch.
Executives with both companies declined to comment on their rivals, though Austin says the choice often boils down to a tradeoff between price and functionality. A rule of thumb, Austin says, government entities that are looking only for a basic functionality and shopping on a tight budget might be lured to Google Apps for Government, while the “feature seekers,” such as data-intensive agencies whose workers more or less live in Excel, would lean toward Office 365.
“It’s a cliché, you pay more with Microsoft but you get more,” he says.
Wyoming CIO Encounters Resistance in Transition to Google Apps
Waters, Wyoming’s CIO, acknowledges that his state’s transition to Google Apps met with some protests from employees who were familiar with Microsoft’s desktop suite, including its Outlook email client, and have resisted the transition.
In the face of Wyoming’s broad push toward a more mobile, collaborative government and the dramatic technology upheaval that has entailed, “we’ve had a few folks leave state government because that doesn’t fit what they signed up for,” he says.
For the larger share who remain in Wyoming’s government but still struggle with the transition, Waters says his team is conducting ongoing training exercises. At the same time, some pockets of the state government continue to work in Excel and other Microsoft environments, and Waters says he has set no timetable for when they must abandon Office in favor of Google’s product.
Herman points out that those training activities carry a labor cost that CIOs should consider when estimating the expense of a cloud migration.
“I don’t have to train people to use Microsoft Office,” he says.
Austin puts it another way: “Nobody ever got fired for buying from Microsoft.”
Security and Privacy in the Cloud Are Always Part of the Discussion
In the context of government procurement, it’s impossible to have a discussion about the cloud without addressing the security concerns.
“Each and every discussion that we have, there’s a discussion around security and privacy,” Kolcun says.
But as government buyers warm to the cloud generally, the kneejerk concern that storing data in a hosted environment invites extra risk has given way to a more nuanced understanding that the public, private and hybrid models carry their own security propositions, and that security in the cloud, as in a data center, is only as good as the configuration of safeguards and defenses.
That suggests that security in the cloud is not the bogeyman it once was, particularly as the federal government has been standardizing its security reviews through the FedRAMP certification program.
Google’s Mihalchik allows that “security is always a part of the discussion,” but it is hardly the insurmountable obstacle that, in the minds of many within the government, it once was.
“Frankly, security is not the question that’s on customers’ minds at this point, again because it is more widely understood,” he says.
Google, Microsoft and every other cloud vendor looking to do business with public-sector customers insist that their security assurances are at least as good as — if not better than — their clients’ posture with a suite of conventional applications.
“The cloud can be enormously more secure,” Herman says, provided that the deployment carries the appropriate permissions and other security considerations. At the same time, the transition to a cloud-based architecture can be nerve-wracking, particularly for an agency’s operations and risk officer, a nontechnical employee who Herman points out “has a different view of the cloud than the CIO does.”
“It’s about each agency and their risk in those implementations,” says Kolcun. “Each and every discussion that we have, there’s a discussion around security and privacy.”