Utilizing Cloud Computing in the Public Sector
Image Source: HP.com
Linda Y. Wong
PA 757 E-Government
Assignment 4: Final Paper
2
Introduction
The public sector is constantly thinking of ways of reducing costs and increasing efficiency. In this digital age and era of dwindling resources, the government should look to cloud computing to reduce costs, similarly to the private sector which has found new and innovative ways to use cloud computing. This paper focuses on a basic background on cloud computing, the current state of cloud computing in the public sector with references to specific case studies at the international, federal, state, and local levels, the benefits and risks of cloud computing, best practices, and finally, what the future of cloud computing may hold in the future of the public sector.
Background on Cloud Computing
Cloud computing Definition
The National Institute of Standards and Technology (NIST) of the U.S. Department of Commerce defines cloud computing as the following: “Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of
configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” (Mell & Grance, 2011). NIST further states cloud computing encompasses five essential characteristics: on-demand self-service, broad-band service, resource pooling, rapid elasticity, and measured service (Mell & Grance, 2011).
Cloud Service Models
The three service cloud models are software as a service, platform as a service, and infrastructure as a service (Mell & Grance, 2011). Software as a Service (SaaS) allows consumer to access the provider’s software applications through the cloud and the
3
consumer need not manage the infrastructure, such as servers, storage, and operating systems (Mell & Grance, 2011). Platform as a Service (PaaS) lets consumers to rent or lease hardware, storage, and operating systems through virtualized servers without purchasing costs and maintenance of both the hardware and software (Olsaker, 2011). Finally, Infrastructure as a Service (IaaS), as known as hardware as a service, permits consumers outsource equipment, such as hardware and servers, for technical operations (Olsaker, 2011).
Deployment Models
There are four deployment models: private, community, public, and hybrid cloud models (Mell & Grance, 2011). First, the private cloud is used by one organization that comprise of multiple consumers, such as business units. Private cloud infrastructure could be owned/managed/operated by the organization itself, a third party, or a combination of the two (Mell & Grance, 2011). Second, the community cloud is “provisioned for exclusive use by a specific community of consumers from organizations that have shared concerned (e.g., mission, security requirements, policy, and compliance considerations) (Mell & Grance, 2011). Third, the public cloud is open to general public use. Fourth, the hybrid cloud is “a composition of two or more distinct cloud infrastructures (private, community, or public) that remain unique entities, but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load balancing between clouds)” (Mell & Grance, 2011).
Origins of Cloud Computing in the Private Sector
The concept of cloud computing began in the 1960s, born from the key ideas of computer pioneers like J.C.R. Licklider and John McCarthy (Cantu, 2011). The first uses were for computational purposes, such as census data processing and financial
4
transactions (Cantu, 2011). Dr. Ramnath Chellappa first used the term, “cloud computing” in 1997 during a lecture and gave the first academic definition of the term as, “a
computational paradigm where computational limits will be determined by economic reasons and not technical limitations” (Ularu, Puican, & Velicanu, 2012).
In the 1990s, telephone firms began to offer Virtual Private Network (VPN) services, which allowed the telephone utilities to create more efficient network bandwidth by
switching traffic to balance usage (Giordanelli & Mastroianni, 2011). This networking was called “telecom cloud” because fluidity of traffic made it impossible to predict which paths the traffic would take (Giordanelli & Mastroianni, 2011). Soon, tech firms, such as
Salesforce.com and Microsoft, began to develop software as a service, or SaaS in the late 1990s and early 2000s (Giordanelli & Mastroianni, 2011). Then, Google, IBM, along with a handful of universities collaborated on a massive cloud computing project in 2007
(Giordanelli & Mastroianni, 2011). Cloud computing technology has evolved quickly within the past several years and undoubtedly will play a bigger role in the tech industry, as well as consumer services.
Cloud Computing Private Sector Key Players
Marston et. al composed a list of various key players in the cloud computing industry: “Established” players, key technology providers, the “Innovators,” and the “enablers” (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011). IBM,
classified under the “established” list, created Blue Cloud, which offers its clients access to large scale application tools and also provides consulting services for its clients (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011). Another “established” player is Google, which has App Engine offering tools for building and hosting web applications (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011). Meanwhile, Microsoft
5
has Windows Azure, and AT&T has two cloud computing services, Synaptic Hosting and Synaptic Storage (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011).
Some of the “key technology providers” include tech giants EMC, Cisco and Apache, the “innovators” include Amazon, SalesForce.com and finally, the “enablers” include Google’s partner, CapGemini, and RightScale (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011). Each of these key players have helped significantly with cloud computing technology, and continue to make their mark in the industry to propel the technology towards regular consumer use.
Current State of Cloud Computing in the American Public Sector
At the federal level, in February 2011 U.S. Chief Information Officer, Vivek Kundra released the “Federal Cloud Computing Strategy,” a 43-page document summarizing the background of cloud computing, the decision framework to move towards cloud computing, case studies that illustrate the framework, and methods to accelerate cloud adoption
(Kundra, 2011). The strategy states that several federal agencies already took the initiative towards implementing cloud computing, which has resulted in “considerable benefits to efficiency, agility, or innovation” (Kundra, 2011). Furthermore, the federal government is one of the top users of community cloud computing, which is built upon Terremark’s Enterprise platform (Marston, Li, Bandyopadhyay, Zhang, Juheng, & Ghalsasi, 2011).
On the state level, several state governments have pursued cloud-based solutions. Due to budget deficits and an aging state workforce, Minnesota shifted its e-mail system to a Microsoft cloud system (Thibodeau, 2010). Meanwhile, Utah took an incredible leap towards cloud computing when it began consolidating all of its IT staff and resources into one department headed by the state Chief Information Officer (Kundra, 2012).
6
Case Studies
There have been several cases which the public sector has successfully transferred some services to the cloud at the international, federal, state, and local levels. On the international scene, countries such United Kingdom, Taiwan, and Japan, have all made moves towards cloud computing. In the United States, the Census Bureau, National
Aeronautics and Space Administration (NASA), and other federal agencies moved specific services to the cloud and they continue to invest in further cloud computing strategies. At the state level, Minnesota, as well as Utah, shifted some basic services towards the cloud. Lastly, several local government agencies, including Klamath County, Oregon and
Californian cities, also have invested in cloud computing. Overall, cloud computing is just beginning to take off in the public sector, and it is expected to gain momentum within the next several years.
International
Numerous governments outside of the United States have taken the initiative to jump into the cloud computing arena. The British government created its down “G-cloud,” a government-wide cloud network and a strategic government priority. The Japanese
government is undergoing a massive shift to have all government computing hosted by a private cloud environment. Meanwhile, the Taiwanese government plans to invest heavily in cloud computing over the next several years because it predicts that cloud computing will be the hot sector in the future.
The British government created a government-wide cloud network called the “G-Cloud” (Wyld, 2009). Former British Prime Minister, Gordon Brown, announced a similar
7
digital strategy to the U.S. federal digital strategy called the “Digital Britain strategy,” aimed to move more services online and make improvements to government IT (Wyld, 2009). The U.K. government hopes to take the lead in the digital economy by providing standards or improving standards for technological research and development (Wyld, 2009).
The national Japanese government is pushing for an ambitious cloud computing campaign called, “Kasumigaseki Cloud” (Wyld, 2009). The private cloud will host all of the government’s computing, which will permit sharing information and resources, and
promote standardization, as well as consolidation, of Japanese IT resources (Wyld, 2009). The various different ministries’ data centers will be integrated so that the upkeep of
individual systems will not be necessary (Wyld, 2009).
In 2010, the Taiwanese government announced plans to make a $744 million dollar investment in cloud computing (IEEE, 2010). The government plans to build a cloud that consolidates the IT systems of over 4,000 government agencies into just two or three computing centers (IEEE, 2010). Moreover, Microsoft signed a contract with the
government in 2009, which established a joint cloud computing research center (IEEE, 2010).
Federal
The United States federal government has taken huge steps to transition agencies towards cloud computing. The General Services Administration (GSA) procured a $2.5 billion dollar deal in May 2011 to move e-mail to a cloud-computing infrastructure
(Association of Records Managers & Administrators, 2011). In addition, GSA announced in February 2009 that it contracted with Terremark Worldwide for several federal
e-government portals including USA.gov and the Spanish-site GobiernoUSA.gov (Wyld, 2009). According to Wyld (2009), moving to cloud hosting allowed GSA to use
8
“‘cloudbursts’ to increase capacity as need, rather than having to host server capacity (and the costs – in personnel and energy – necessary to support this largely idle capacity) to handle the web traffic experienced only at these peak times” (Wyld, 2009).
The Census Bureau took a major leap towards cloud computing during the 2010 Census, marking the first time an agency has used cloud computing for such a “mission critical” project (Farb, 2011). The agency hired Acumen Solutions to develop a
Salesforce.com Customer Relationship Management (CRM) system within 12 weeks, which the Census Bureau had access to real-time reporting, newsletters, and various reference materials (Farb, 2011). In all, the CRM system collected demographic information on over 308 million in the United States (Farb, 2011).
The National Aeronautic Space Administration (NASA) deployed the NEBULA cloud platform, which NASA describes as “an open-source cloud computing project and service developed to provide an alternative to the costly construction of additional data centers whenever NASA scientist or engineers require additional data processing” (NASA, 2012). The cloud platform allows for “greater transparency and public involvement with space efforts” (Wyld, 2009).
State
Many states have already taken steps to move towards cloud computing to save money on technology procurement. States that have made the move include California, Minnesota, and Utah, which have contracted e-mail and other online collaboration services through the cloud (National Conference of State Legislatures, 2011). Colorado has also shifted towards a hybrid cloud solution designed to accommodate different levels of security on government data. As technology becomes cheaper and more cost effective,
9
state governments will undoubtedly move towards cloud computing as a cost-saving method especially in this era of scarce budget and staffing resources.
In 2010, the Minnesota state government announced it would shift its e-mail system to Microsoft’s cloud, Business Productivity Online Suite (Thibodeau, 2010). This marked one of the biggest public sector shifts towards cloud computing, which was spurred by cost savings during a time of budget deficits and an aging state government workforce
(Thibodeau, 2010).
In 2005, the State of Utah moved towards cloud computing first through a consolidation of IT services and IT staff under the Utah State Chief Information Officer (Kundra, 2012). The state decided in 2009 to move to a hybrid cloud approach, which combined public cloud services and private cloud services to meet security requirements and specialized access (Kundra, 2012). This move to cloud computing also benefited local government agencies because not only does the state provide free “public cloud
provisioned services,” the state also provides paid services which local governments pay for usage, such as Geographic Information Systems (GIS) and Customer Relationship Management from Force.com (Kundra, 2012). According to Kundra, with cloud computing “the State has created an enterprise where public or private services can be reused and provisioned on demand to meet agency needs as cost-effectively as possible. This effort has had an immediate impact on State agencies and is expected to result in significant future savings” (Kundra, 2012).
When the State of Colorado began to consolidate 17 Executive Branch agencies’ IT systems in 2008, the state decided to shift to an enterprise cloud (Kundra, 2012). The state employed a hybrid cloud solution for the 17 state agencies, which encompassed three elements to appropriate various security levels: a private cloud (high security data and
10
systems), a virtual private cloud (archiving), and a public cloud (e-mail and websites) (Kundra, 2012). The public cloud is a pilot program for Google Apps for e-mail and office applications, which allowed Colorado to take down 122 e-mail servers, thus leading to substantial cost savings (Kundra, 2012).
Local
As with many state governments, local governments sought cloud-based solutions due to budgetary problems. The City of Los Angeles faced huge budget deficits, and sought to relieve some of the costs of the IT department by shifting to Google products. Meanwhile, the County of Klamath in Oregon switched to the Microsoft productivity suite, which not only cut costs on internal servers, but also freeing up IT staff resources to maintain those servers. As budget issues become direr, it forces local governments to think creatively about cutting IT costs, which leads to shifting to cloud computing.
Due to budgetary crisis, the City of Los Angeles announced in 2009 that it planned to shift to Google Apps in a five-year contract with Google (Kundra, 2012). The city
government planned to shift to Google’s e-mail service and begin using Google Apps Premier Edition suite (Kundra, 2012). Not only did the city expect to save $5.5 million over the five-year contact, the city is able to offer staff more storage space, access to instant messaging, and other valuable productivity services (Kundra, 2012)
The County of Klamath, Oregon, faced budgetary issues and the county’s IT director began to investigate potential cloud-computing solutions (Kundra, 2012). The county migrated to the Microsoft Online Business Productivity Suite because staff needed to use video conferencing regularly (Kundra, 2012). The shift to cloud-based computing cut
11
costs and freed up valuable IT personnel, who were not required to manager individual servers (Kundra, 2012).
The table below shows the summary of all the cloud computing case studies above. Table 1.0
Summary of Cloud Computing Case Studies Jurisdiction
Level Agency Cloud-based Solution
United Kingdom A government-wide cloud network called the “G-Cloud.”
Taiwan
Build a cloud that consolidates the IT systems of over 4,000 government agencies into just two or three computing centers. Joint venture with Microsoft to build a cloud computing research center.
International
Japan
Implementing the “Kasumigaseki Cloud,” which is a private cloud that will host all Japanese
government computing.
GSA Procured a $2.5 billion dollar deal in May 2011 to move e-mail to a cloud-computing infrastructure U.S. Census
Bureau
Salesforce.com Customer Relationship
Management (CRM) system designed to process big data for the 2010 Census
Federal
NASA NEBULA cloud platform: an open-source cloud computing project to replace costly data centers Minnesota Microsoft’s cloud, Business Productivity Online Suite, for e-mail services
Utah
A hybrid cloud approach, which combined public cloud services and private cloud services to meet security requirements and specialized access. State
Colorado
An enterprise cloud comprised of a private, virtual, and public cloud systems to accommodate varying levels of security.
City of Los
Angeles Shift to Google Apps in a five-year contract with Google. Local
12
Benefits of Cloud Computing
Cloud computing provides governments with many cost-saving opportunities, as well as other ways to increase IT efficiency and utilization. As mentioned in the case studies, many state and local governments looked to cloud-based solutions to cut IT budgets and to relieve IT staff from managing internal servers. Other benefits of cloud computing include information and resource sharing between departments, increased collaboration, better economies of scale, reduced IT infrastructure demands, better capabilities of disaster recovery, reduced energy consumption, more environmentally friendly, and expanded data storage space.
One of the primary reasons a public sector agency would be interested in shifting towards cloud computing is the cost savings. With many government agencies looking to consolidate IT services and data centers, cloud computing appears to be an optimal solution to major cost savings (Olsaker, 2011). Since servers are not housed on internal servers, agencies will decrease maintenance and upgrading costs, while also reducing the environmental damages from electricity usage (Wyld, 2009). Also, agency staff does not have to install software on their computers, while the organization only needs to pay for the number of required licenses to access the applications (Keswani, 2012). There is also better economics of scale and services have greater scalability with a bigger resource pool available during high demand (Wyld, 2009; Kundra, Federal Cloud Computing Strategy, 2011). Lastly, cloud computing allows elimination of duplicated services through
consolidation and streamlining data and infrastructure (Kundra, Federal Cloud Computing Strategy, 2011).
Another major benefit is resource sharing and improved collaboration. Documents on the cloud, such as Google Docs, can be accessed and amended by multiple users
13
simultaneously (Gerea, 2012). By allowing government staff to work collaboratively in shared spaces or telecommute, there is a reduction in demand for office space (Helfrich, Eggers, & Tierney, 2012). Also, with the growth of knowledge sharing and collaboration between agencies, there can be a focus on broader government-wide goals (Helfrich, Eggers, & Tierney, 2012).
Risks and Other Issues
While there are many benefits to cloud-based computing, there are also some risk and other issues. Most of the concern is related to security risks, which is incredibly important to government agencies that handle secure and sensitive information, such as personal identifiable information (PII). Many people are wary of putting private information on the cloud because of hacking concerns, given the high profile hacking cases in the past (Anonymous, Wiki leaks, etc.). Another issue related to security is the decision to use a private, public, or hybrid cloud system. Third, using cloud-base solutions will lead may lead to legal issues. Fourth, the government agency will need to revise its procurement policies and practices. Lastly, public managers must create a new set of performance metrics to evaluate whether their cloud-based solutions is achieving agency goals and cost savings.
The primary concern about cloud computing is security and potential hacking
attacks on sensitive government data. According to the Norton Cybercrime Index, in 2011 alone, hacking attacks have compromised over 187.2 million identities (Dyer, 2012).
Currently, there are no standards to certify security of IT contractors’ cloud systems (Wyld, 2009). The agency will have to decide whether it wants to utilize the private, public, or hybrid cloud system. All these types of cloud systems have benefits and drawbacks: a private cloud is usually more secure but it is also more expensive, a public cloud is less
14
costly but limits customization, and a hybrid cloud combines the benefits of private and public cloud systems. Dyer (2012) recommends agencies research where a hosting provider is registered and where all the data centers are located (within the state, the United States, or abroad), and what the security agreement is with the provider (Dyer, 2012). Clearly, these privacy and security issues will need to be addressed in order for the public sector to fully embrace cloud computing.
Other issues with cloud computing include legal issues procurement policies, and performance metrics. Kewswani (2012) notes that there are four contractual issues when an organization decides to pursue cloud computing: 1) service uptime 2) server and data security 3) incident response 4) exit plan (Keswani, 2012). Service uptime refers to the guaranteed minimal level of availability of services by the contracted provider, which is usually written in the contract (Keswani, 2012). Server and data security are the written policies on security issues like data encryption, security standard compliance, and physical security regarding access to the data servers (Keswani, 2012). Incident responses refer to the procedures following detrimental events, like data breaches (Keswani, 2012). Lastly, the exit plan refers to the agency’s freedom to conclude the agreement while ensuring uninterrupted service (Keswani, 2012).
The fourth cloud-computing issue is government procurement and contracting processes. Currently, federal guidelines for IT procurement is not on a “pay-as-you-go” model or “as needed” basis (Wyld, 2009). Heavily regulated and new rules will
undoubtedly need to be modified to be more cloud computing friendly, while encouraging cost savings and improvements in efficiency (Wyld, 2009). Furthermore, public managers will have to balance having a consolidated, streamlined platform/infrastructure to avoid
15
redundancy, while also keeping in mind that there is no one size fits all solution to all agencies (Wyld, 2009).
Finally, agencies will have to formulate performance metrics to measure the effectiveness of shifting to cloud computing. Several analysts calculated a three to five time cost savings with cloud-based computing over typical internal data centers, while McKinsey consulting estimated that cloud computing is more costly (Wyld, 2009).
Therefore, it is imperative that public managers create a set of measurements, which will keep track of cost savings and efficiencies from adopting a cloud-based solution.
Despite the potential security risks and other issues with cloud computing that government may face, the benefits most likely outweigh the costs, and government will need to embrace the future in technological development.
Best practices
The government can take extra steps to ensure that the risks and other issues are mitigated when migrating IT systems to the cloud. Salow et. al (2011) suggests that
government can mitigate legal issues and regulatory concerns by ensuring data storage is in the United States (Salow, Meier, Goodwin, & David, 2011). Moreover, agencies need to have well-defined supporting agreements, including non-disclosure contracts and minimal service level contracts with their IT contractors (Salow, Meier, Goodwin, & David, 2011). Physical security of data centers and “information redundancy” is essential (Salow, Meier, Goodwin, & David, 2011). In addition to these three best practices, the agency should also have a system of data backups and data archiving, know what security is being provided, and know what the process to terminate the agreement (Olsaker, 2011).
16
Future of Cloud Computing in the Public Sector
As cloud computing becomes more pervasive, the government at all levels will most likely embrace this revolutionary way of computing because of the potential cost savings. Wyld (2009) predicts that the federal government will continue to make huge strides in cloud computing, but this effort will be stifled by tension between government agencies (Wyld, 2009). Meanwhile, budgetary pressures will force more public sector organizations, especially state and local governments, to more towards hybrid or public cloud systems (Wyld, 2009). Finally, many developed countries will continue to make process on their own cloud computing strategies, while developing countries may embrace cloud computing because it may enable governments and its citizens to modernize more quickly than
regular computing (Wyld, 2009).
Conclusion
As society continues to progress technologically, cloud computing appears to be growing exponentially. There are many benefits of switching to cloud-based solutions, but there are also risks and other issues that the government must resolve before
implementation. Government agencies can take extra precautions using best practices, and cloud computing will continue to grow at all levels of government as the rest of society fully embraces this new and innovative way of computing.
17
References
Association of Records Managers & Administrators. (2011, July 1). U.S. agencies to spend $2.5 billion on cloud storage. Information Management Journal , 11.
Cantu, A. (2011, December 20). The History and Future of Cloud Computing. Forbes.
Dyer, J. (2012, October). Cloud concerns: the safe route to adoption. Computer Fraud & Security, 16-19.
Farb, B. (2011). Census Bureau Takes to the Cloud. Customer Relationship Management, 59-60. Gerea, F. (2012). Implementation of Cloud Computing into VoIP. Database Systems Journal, 3 (2). Giordanelli, R., & Mastroianni, C. (2011). The Cloud Computing Paradigm: Characteristics, Opportunities and Research Ideas. ICAR.
Helfrich, D., Eggers, W., & Tierney, C. (2012). Let’s Meet in the Fed Cloud. The Public Manager. IEEE. (2010, August). Taiwan Sees Clouds in Its Forecast. IEEE Spectrum, p. 13.
Keswani, A. (2012). Community Economic Development in the Cloud: How Low-Cost Technology Is Democratizing Development and Driving Community Growth. Journal of Affordable Housing & Community Development Law, 21 (1), 141-159.
Kundra, V. (2011). Federal Cloud Computing Strategy.
Kundra, V. (2012). State of Public Sector Cloud Computing. CIO Council.
Marston, S., Li, Z., Bandyopadhyay, S., Zhang, Juheng, & Ghalsasi, A. (2011). Cloud computing - The business perspective. Decision Support Systems, 51 (1), 176-189.
Mell, P., & Grance, T. (2011). The NIST Definition of Cloud Computing: Recommendations of the National Institute of Standards and Technology. Maryland.
NASA. (2012, 5 23). NEBULA Cloud Computing Platform. Retrieved December 3, 2012, from nebula.nasa.gov
National Conference of State Legislatures. (2011). Can Technology Save Money? State Legislatures, 37 (4), 11.
Olsaker, E. (2011). Making Sense of Cloud Computing in the Public Sector. Government Finance Review, 27 (5), 28-32.
Salow, H., Meier, J., Goodwin, & David. (2011, June). Cloud Computing Trend Sparks Compliance Concerns. National Defense, 43.
18 Thibodeau, P. (2010). Minnesota Moves E-mail to Microsoft's Cloud. Computerworld, 4.
Ularu, E.-G., Puican, F., & Velicanu, M. (2012). Analysis on Cloud Computing Database in Cloud Environment – Concept and Adoption Paradigm. Database Systems Journal, III (2), 41-48.
Wyld, D. C. (2009). Moving to the Cloud: An Introduction to Cloud Computing in Government.
