Cloud Gaining Traction In Government, Education Markets

The potential for reduced costs is causing cloud computing to gain momentum in the government and education space.

"I'm seeing SaaS offerings growing rapidly, driven by the education software developers seeing an opportunity to gain new customers," said Jay Kirby, vice president of networking at Lumenate, Inc., a Dallas-based channel partner. "We're also seeing many of our clients re-architecting their infrastructure to take advantage of SaaS and cloud-type offerings. It's largely about speed of deployment and flexibility in getting to applications."

But many of the same issues that inhibit cloud issues in the business community also impact government and education. Most notably, prospects express concerns about security and availability, especially when the infrastructure is carrying sensitive personal information. Therefore, assessing the relative sensitivity of the respective agency is often one of the first steps in the sales cycle.

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"What we're seeing is pockets of departments that are not guided by as many compliance regulations taking advantage of the cloud as fast as they can," said Kirby. "We are seeing the same thing with managed services in that space. It costs them too much money to continually build out these networks and to operate them, so they are looking for new ways to gain efficiencies. It's happening in education, and it's happening in government."

To that end, most of the major players in the infrastructure-as-a-service (IaaS) space, including Amazon Web Services, Google, HP and Microsoft are actively marketing their government cloud practices. Amazon lists NASA's Jet Propulsion Laboratory, the Recovery Accountability Transparency Board and the National Renewable Energy Laboratory among its cloud clients.

Channel partners, such as Lumenate, have also extended such strategies.

"This is a monstrous opportunity for the channel, so we created a dedicated sales team," added Kirby. "We found some talented individuals who are working at the CIO/director level in K-12, as well as some talented account managers who have been in that space for 10 or 15 years, and this has been really effective. The priorities and processes are different, and the sales cycles are typically longer than commercial or enterprise sales. A lot of times, very large projects can take more time to roll out because of the funding mechanisms. The consulting aspect is not only based on cool technology but also on guidance and mentorship in applying that technology in the right way."

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According to IDC Government Insights, nearly one-third of the federal government's IT budget is spent on maintaining and upgrading older infrastructure, and the Framingham, Mass.-based market researcher believes that the same ratios are substantially true for state and local governments.

"I'm seeing more RFPs around hosted voice, hosted call center, SIP trunking, and things of that nature," said Chris Vincent, president of Global Data Services, a Lafayette, La.-based channel partner who pursues state and local government contracts. "They are actively entering the procurement process because they see cost benefits in consuming technology on a per-seat, per-month basis."

Messaging is also a key technology being moved to the cloud. The city of Boston announced last week that Google and Appirio had been granted a contract to move all city workers and schools to a unified messaging and collaboration platform based on Google Apps by the end of the year. The city claims nearly 75,000 email users, including accounts for its 57,000 public schools students. The move is expected to cut expenses by more than 30 percent per year.

A number of government agencies in major cities have made similar moves to the cloud. Last year, the Chicago public school system made a similar transition to the cloud, in a move expected to save $6 million over three years.

Some of the savings realized by local government agencies comes from the reduced need to maintain high-end staff, according to Vincent.

"As the technology moves forward, it's harder for public-sector entities to keep the necessary skill sets within their four walls," he said. "So when they deploy a premises-based solution, they often find themselves struggling to support it."