Quick quiz: what recently announced U.S. government initiative will transform American enterprise and soon ripple through Canadian and global business?
The second economic stimulus package? A new round of tax cuts? No, it's the "Cloud First" policy launched late last year by the United States chief information officer (CIO) Vivek Kundra. As part of a national IT overhaul, the policy requires U.S. federal departments and agencies to adopt cloud computing – web-based programs, files and storage – whenever feasible. This affects the core of the U.S. government and military: the departments of agriculture, commerce, energy, housing, interior, justice, labor, state, transportation and treasury, along with departments of defence, army, air force, navy and homeland security.
What does this mean? Cloud computing is now literally the law (at least in the United States) and the new normal.
This is not some airy-fairy policy guideline: it's a direct order with tight deadlines. As of March 2011, federal agencies are obligated to identify three "must move" services to the cloud. Think email, human resources forms, travel applications and productivity tools like word processing, presentation and spreadsheet programs. Within nine months, at least one of these three services must be up and running online. Within 15 months, the remaining two must be operational on the web.
What's driving this cloud mania? In the jaws of a trillion-dollar-plus federal deficit, the Obama administration desperately wants to reduce IT capital and operating costs. According to a December 2010 study by Forrester Consulting, organizations save between 38% and 56% on IT costs annually if they migrate to Google Apps – a cloud-based messaging and collaboration platform.
Forrester says cloud adopters also see double-digit productivity gains. These include improvements in email search, spam filtering, archiving and response times. Another huge benefit: more and better collaboration. Document sharing is easier, incorporating feedback is faster and meetings are more efficient (both face-to-face and virtual), especially with external partners and suppliers.
On the downside, critics caution that many cloud issues still need to be resolved, particularly in the areas of data sovereignty, privacy and security. How will all this affect business? Well, strap yourself in and hang on, Obi Wan CEO. The Cloud First policy will be a "big bang" event for online computing and trigger a meteor shower of new opportunities and challenges on multiple levels and different fronts.
Over the next year-and -a-half, federal government CIOs across the U.S. will be scrambling to pick and relocate the "must move" applications. For cloud consultants, this will be a cyber gold rush. Vendors will be literally racing to make contacts, pitch proposals and sign deals to assist with the online migration. It's no coincidence that just days after the Cloud First launch, Google bought an 18-storey, 2.9-million-square-foot building in Manhattan for nearly $2 billion. This is reportedly Google's biggest real estate investment to date, as well as the largest single-asset sale in the U.S. in 2010.
According to a Google engineering director, the building will be a key command centre in Google's exploding cloud and enterprise business.
Once cloud computing becomes embedded in the U.S. federal government, I predict the real fun will begin. Look for the feds to leverage their cloud power to the max and make cloud adoption a key condition for federal dollars – whether it's state or local governments seeking federal funds, a supplier bidding on a federal contract, a small business applying for a federal loan or a bank seeking a federal bailout.
Want government money? Show us your cloud. No cloud, no moolah.
The point will be to push, prod and provide incentives to as many organizations of all sizes and stripes to adopt cloud technology as possible. That will get U.S. companies – and collectively the U.S. economy – more competitive.
How should Vancouver businesspeople respond? As business clouds quickly deepen and broaden across the U.S. economy, they won't stop at the American border. To keep pace, organizations around the world – especially those in B.C. and Canada, which are so closely connected with U.S. interests – need to re-evaluate their enterprise IT plans. A new cyber frontier has arrived and executives must decide now whether to get their head in the clouds or wait for the sky to fall.
Garrett Wasny (www.garrettwasny.com) is a Vancouver web-productivity consultant.
